'Stock market quotations contribute to better allocation of capital and promoting the habits of savings and invsetments''. Explain.

R' Limited is a real estate company which was formed in 1950. In about 56 years of its existence the company has managed out from a niche of itself in this sector. Lately this sector is witnessing a boom due to the fact that the Indian economy is on the ries. The income of middle class are rising. More people can afford to buy homes for themselves due to easy availiability of loans and accompanying tax concessions. To expand its business in India and abroad the company is weighing various options to raise money through equity offerings in India. Whether to tap equity or debt market whether to raise the necessary finance from money market or capital market. It is also planning to list itself in New York Stock Exchange to raise money through ADR. To make its offering attractive it is planning to offer lots of financial plans, products to its stakeholders and investors and also explain its listing at NSE after complying with the regulations of SEBI. (a) What are the regulations of SEBI that company must comply with? (b) How does the SEBI exericse control over 'R' limited in the interest of investors? (c) What do you mean by a stock index? How is it calculated? (d) What concluaiona can you drow from the various movements of NSE stock indices? (e) What factors affect the movement of stock indices? Elaborate on the nature of these factors. What relatonship do you see between the movement of indices in World Market and NSE indices?

Efficiency of capital has long been an area of neglect and remains so. This aspect is underscored in the eleventh plan draft, ironically in its demand for the rate of investment being raised to 35.1% of GDP from 29.1% in 2004–2005. The irony lies in the fact that the planning commission has consistently relied on the Incremental Capital Output Ratio (ICOR) as tool of expediency rather than one designed to promote efficiency. Yet, the ratio conceptually seeks to get the most out of the capital stock that is existing and is being added. The ratio now is 3.7, i.e the capital needed for an out-put of 1 is 3.7 times. If the effective ratio is brought down during 2007-2012, then it would be possible to achieve a GDP growth value of 8.9% over the period with a lesser level of investment than 35.1%. Nobody doubts that capital formation is critical to a higher rate of growth in GDP, but efficiency lies not so much on the capital stock as its utilisation. The issue of efficiency of capital is now assuming adequate importance from the Government of India.