LIC AAO Mains 2019- Financial and Insurance Market Questions | 26th June

Money market is a market for debt securities that pay off in the short term usually less than one year, for example the market for 90-days treasury bills. This market encompasses the trading and issuance of short term non-equity debt instruments including treasury bills, commercial papers, bankers acceptance, certificates of deposits, etc.

The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to protect the interests of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith and incidental thereto.

The Market Intermediaries Regulation and Supervision Department (MIRSD) is responsible for the registration, supervision, compliance monitoring and inspections of all market intermediaries in respect of all segments of the markets viz. equity, equity derivatives, currency derivatives, debt and debt related derivatives and commodity derivative.

An equity share, commonly referred to as ordinary share also represents the form of fractional ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights.

The issue of new securities to existing shareholders at a ratio to those already held.

In the primary market the securities like shares and debentures are offered to the public subscription for the purpose of raising capital or fund

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the remaining profit after all costs of production, administration, and financing have been deducted from sales, and income taxes recognized. As such, it is one of the best measures of the overall results of a firm, especially when combined with an evaluation of how well it is using its working capital. The measure is commonly reported on a trend line, to judge performance over time. It is also used to compare the results of a business with its competitors.

The consumption function, or Keynesian consumption function, is an economic formula that represents the functional relationship between total consumption and gross national income.

Cumulative convertible preference shares is a type of share, where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company.

A sales tax is a consumption tax imposed by the government on the sale of goods and services. A conventional sales tax is levied at the point of sale, collected by the retailer, and passed on to the government.

Policyholder definition: A policyholder is a person who has an insurance policy with an insurance company.

A Third Party Administrator (TPA) is a person or organization that processes claims and performs other administrative services in accordance with a service contract, usually in the field of employee benefits.

Claim Service Representative- Also called CSR; they are responsible for clerical completion of all claim files.

Public Liability Insurance or PLI offers cover for third party liabilities (Bodily Injury/Property Damage) arising out of the premises and operations of the Insured and legal costs incurred in connection therewith.

Policy is the written insurance contract that may include all clauses, riders and endorsements.