ZE
ZESTEXAM

IBPS PO Capital Market & Stock Exchange

Study Material · Concept Notes · Shortcuts

This page covers IBPS PO Capital Market & Stock Exchange with complete concept notes, 22 graded practice MCQs, key points and exam-specific tips. Free to study.

0 PYQs
none yet
22 Practice
MCQs
8 Key Points
to remember
Free
no login needed
Take Free Mock →Full Practice Set
Also for:IBPS ClerkSBI POSBI ClerkRBI Gr B
PYQs
0
Practice
22
Key Points
8
Access
Free
Concept Notes

Capital Market & Stock Exchange— Rules & Concept

1.Core Concept

Read this first — the foundation of the topic

CAPITAL MARKET & STOCK EXCHANGE ━━━━━━━━━━━━━━━━━━━━━━━━━━━━

CORE CONCEPT ━━━━━━━━━━━━━━━━━━━━━━━━━━━━

A Capital Market is a place where long-term funds are raised and invested. Companies and governments borrow money here for more than one year. Think of it like a big marketplace — but instead of vegetables, people buy and sell shares and bonds. There are two parts:

• Primary Market — New shares/bonds are sold for the first time (IPO happens here). • Secondary Market — Already issued shares are bought and sold among investors (Stock Exchange operates here).

━━━━━━━━━━━━━━━━━━━━━━━━━━━━ KEY RULES & PROPERTIES

━━━━━━━━━━━━━━━━━━━━━━━━━━━━ • Capital Market deals in long-term instruments: Equity Shares, Preference Shares, Debentures, Bonds.

• Money Market deals in short-term instruments (less than 1 year). Do not mix these two. • SEBI (Securities and Exchange Board of India) regulates the capital market. Established in 1988, given statutory powers in 1992.

• BSE (Bombay Stock Exchange) — established in 1875 — is Asia's oldest stock exchange. Index is called SENSEX (tracks 30 companies). • NSE (National Stock Exchange) — established in 1992. Index is called NIFTY 50 (tracks 50 companies).

• SENSEX base year is 1978-79, base value is 100. • NIFTY base year is November 3, 1995, base value is 1000.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━

2.Formula Block

Memorise — at least one formula appears in every paper
SENSEX = (Sum of Market Cap of 30 companies / Base Market Cap) x 100
Market Capitalisation = Current Share Price x Total Number of Shares

━━━━━━━━━━━━━━━━━━━━━━━━━━━━

━━━━━━━━━━━━━━━━━━━━━━━━━━━━

3.Exam Patterns

What examiners ask — read before attempting PYQs

━━━━━━━━━━━━━━━━━━━━━━━━━━━━ IBPS PO frequently asks: 1. Which body regulates capital markets? (Answer: SEBI) 2. Full form and establishment year of BSE/NSE 3. Difference between Primary and Secondary markets 4.

Which index tracks how many companies? 5. Base year of SENSEX or NIFTY ━━━━━━━━━━━━━━━━━━━━━━━━━━━━ SHORTCUT / TRICK ━━━━━━━━━━━━━━━━━━━━━━━━━━━━ TRICK 1 — B-S-N-N Memory Code: • BSE → Sensex → 30 companies → Base 100 • NSE → Nifty → 50 companies → Base 1000 Remember: NSE has MORE companies and HIGHER base value. TRICK 2 — Market Type by Time: • Less than 1 year = Money Market • More than 1 year = Capital Market Just ask: 'Is the time more than 1 year?' Yes = Capital Market. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━

4.Worked Example

Solve this step-by-step before moving on
1
Step 1

IPO = Initial Public Offering = company sells shares FOR THE FIRST TIME.

2
Step 2

First-time issue = Primary Market. This is where new securities are created.

3
Step 3

After IPO, shares are listed on BSE. Investors now buy/sell among themselves.

4
Step 4

Trading among investors on BSE = Secondary Market. Answer: IPO → Primary Market. Trading on BSE → Secondary Market. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━

5.Exam Traps

Common mistakes students make — avoid these

━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Students confuse BSE with NSE numbers. Remember: BSE is OLDER (1875) but NSE's Nifty tracks MORE stocks (50). Also, many students think SEBI was established in 1992 — but it was SET UP in 1988 and got statutory powers (legal authority) in 1992 via the SEBI Act.

Key Points to Remember

  • Capital Market deals in long-term funds (more than 1 year) — instruments include shares, bonds, and debentures.
  • Primary Market = new securities issued for first time (IPO); Secondary Market = existing securities traded between investors.
  • SEBI regulates India's capital market — established 1988, statutory powers granted via SEBI Act 1992.
  • BSE (Bombay Stock Exchange) was established in 1875 — Asia's oldest stock exchange — index is SENSEX.
  • SENSEX tracks 30 companies; base year is 1978-79; base value is 100.
  • NSE (National Stock Exchange) was established in 1992 — index is NIFTY 50, tracks 50 companies; base value is 1000.
  • Market Capitalisation Formula: Current Share Price x Total Number of Shares Outstanding.
  • Money Market = short-term (less than 1 year); Capital Market = long-term (more than 1 year) — never mix these.

Exam-Specific Tips

  • BSE was established in 1875 and is the oldest stock exchange in Asia.
  • NSE was established in 1992 and its benchmark index NIFTY 50 tracks 50 companies.
  • SEBI was established in 1988 but received statutory (legal) powers only in 1992 through the SEBI Act, 1992.
  • SENSEX base year is 1978-79 with a base value of 100.
  • NIFTY 50 base date is November 3, 1995 with a base value of 1000.
  • Full form of SENSEX is Sensitive Index; full form of NIFTY is National Stock Exchange Fifty.
  • IPO stands for Initial Public Offering and it occurs in the Primary Market.
  • SEBI headquarters is located in Mumbai, Maharashtra.
Practice MCQs

Capital Market & Stock Exchange — Practice Questions

22graded MCQs · easy to hard · full solution & trap analysis · showing 20 of 22

All MCQs →
Practice 1medium

A bank classifies an advance as 'Doubtful' under NPA norms when the loan remains non-performing for a period of:

Practice 2medium

Under Basel III norms applicable in India, the minimum Capital-to-Risk-Weighted Assets Ratio (CRAR) that banks must maintain is:

Practice 3medium

The Insolvency and Bankruptcy Code (IBC) 2016 prescribes a maximum resolution timeline of how many days for the resolution of a corporate insolvency case?

Practice 4medium

Under the Insolvency and Bankruptcy Code (IBC) 2016, what is the maximum statutory timeline for completing the Corporate Insolvency Resolution Process (CIRP) including extensions?

Practice 5medium

Which of the following best describes the relationship between Gross NPA and Net NPA in a bank's balance sheet?

Practice 6medium

Under the Securities and Exchange Board of India (SEBI) framework, which of the following best describes the primary function of a Clearing Corporation in the stock exchange ecosystem?

Practice 7medium

A bank's treasury department is evaluating investment in Government Securities (G-secs) for its Statutory Liquidity Ratio (SLR) compliance. Under RBI guidelines, which of the following statements about G-secs held for SLR purposes is CORRECT?

Practice 8medium

Which of the following is NOT a component of Tier 1 capital under Basel III norms?

Practice 9medium

A bank classifies a loan as 'Sub-standard' NPA when the loan remains non-performing for a period not exceeding which duration?

Practice 10medium

Under the SARFAESI Act 2002, a bank can initiate asset seizure proceedings without obtaining a court order for non-performing advances of what minimum amount?

Practice 11medium

Under the SARFAESI Act 2002, a bank can initiate asset seizure proceedings without obtaining a court order for non-performing loans exceeding which amount?

Practice 12hard

An Asset Reconstruction Company (ARC) purchases a portfolio of Non-Performing Assets (NPAs) from a commercial bank at a 40% discount to the book value of ₹500 crore. The ARC issues Security Receipts (SRs) to the bank as consideration. Six months later, the ARC recovers ₹180 crore from the underlying assets. According to RBI regulations on ARCs and Security Receipts, which statement BEST describes the accounting and redemption position?

Practice 13hard

An Asset Reconstruction Company (ARC) purchases a non-performing loan portfolio from a bank at a discount. Under RBI regulations, what instrument does the ARC issue to the bank in exchange for the loan assets?

Practice 14hard

An NPA is classified as 'Doubtful' when the asset remains non-performing for a period exceeding which timeframe?

Practice 15hard

Under the Insolvency and Bankruptcy Code (IBC), 2016, the maximum statutory timeline for resolution of a corporate insolvency is how many days, including any extension?

Practice 16hard

A bank's Capital-to-Risk-Weighted Assets Ratio (CRAR) under Basel III must not fall below which minimum threshold as prescribed by RBI for Indian banks?

Practice 17hard

Asset Reconstruction Companies (ARCs) in India are regulated by which authority, and what is the primary instrument through which ARCs monetize their acquired bad loans?

Practice 18hard

Under the Insolvency and Bankruptcy Code (IBC) 2016, what is the maximum timeline for completion of the corporate insolvency resolution process (CIRP) including any extension granted by the National Company Law Tribunal (NCLT)?

Practice 19hard

A bank classifies a corporate loan as 'Doubtful' under the NPA classification norms. According to RBI's provisioning guidelines, what is the minimum provisioning requirement for the 'Doubtful' category?

Practice 20hard

A bank's Gross NPA ratio is 2.5% and its provisioning coverage ratio (PCR) is 60%. What is the bank's approximate Net NPA ratio?

2 more practice questions in the Study Panel

Difficulty-graded, bookmarkable, with timed mode. Free account — no credit card.

Create Free Account →Browse Questions

60-Second Revision — Capital Market & Stock Exchange

  • Remember: Capital Market = long-term (>1 year); Money Market = short-term (<1 year). This difference is a direct MCQ trap.
  • Remember: BSE = 1875 (oldest in Asia) → SENSEX → 30 stocks → base value 100 (base year 1978-79).
  • Remember: NSE = 1992 → NIFTY 50 → 50 stocks → base value 1000 (base date Nov 3, 1995).
  • Trap: SEBI was SET UP in 1988 but got legal/statutory powers in 1992 — exams ask both years separately.
  • Formula: Market Cap = Share Price x Number of Shares — used to calculate index weight of a company.
  • Remember: Primary Market = first-time issue (IPO/FPO); Secondary Market = resale of existing shares on stock exchanges.
  • Trick: NSE has MORE companies (50) and HIGHER base value (1000) than BSE (30 companies, base 100).
←Mutual Funds & InsurancePayment Systems — UPI, RTGS, NEFT→
Studied the notes? Now test yourself
See how Capital Market & Stock Exchange appears in the real IBPS PO paper
Full timed mock · Instant All-India percentile · Free
Start Free Mock →Practice Panel
✓ Free forever for basic prep✓ No app download✓ Real exam-pattern questions
Test Capital Market & Stock Exchange under exam conditions
Free IBPS PO mock · instant rank · no login
Free Mock →