Hybrid instruments have both the features of equity and debenture. This kind of instruments is called as hybrid instruments. Examples are convertible debentures, warrants etc.
Warrants- In finance, a warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed exercise price until the expiry date.
The main functions of financial market:-
- It provides facilities for interaction between the investors and the borrowers.
- It provides pricing information resulting from the interaction between buyers and sellers in the market when they trade the financial assets.
- It provides security to dealings in financial assets.
- It ensures liquidity by providing a mechanism for an investor to sell the financial assets.
- It ensures low cost of transactions and information.
National Stock Exchange
In the year 1991 Pherwani Committee recommended to establish National Stock Exchange (NSE) in India. In 1992 the Government of India authorized IDBI for establishing this exchange. In National Stock Exchange there is trading of equity shares, bonds and government securities. India's Stock Exchanges particularly National Stock Exchange has achieved world standards in the recent years. The Index of NSE is called S&P CNX Nifty 50 (Standard & Poors Crisil NSE Index). The value of index is calculated by taking into consideration the movement in share price and trading volume of total 50 shares.
Bombay Stock Exchange (BSE)
Bombay Stock Exchange is one of the oldest stock exchanges in Asia was established in the year 1875 in the name of "The Native Share & Stock Brokers Association". Bombay Stock Exchange is located at Dalal Street, Mumbai, India. It got recognition in 1956 from the Government of India under Securities Contracts (Regulation) Act, 1956. Presently BSE SENSEX is recognized over the world. The index of BSE is called Sensex (Sensitivity Index). The value of index is calculated by taking into consideration the movement in share price and trading volume of total 30 shares.