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When Should I Start Preparing for IIT?

9th Standard IIT JEE

I remember back in 2006, IIT JEE administration introduced a stringent rule which allows maximum two attempts for an aspirant to get into IIT JEE. The step was taken in order to curb the number of students who get into IIT by preparing again and again for 3, 4 or even 5 years. It was infusing not the actual talented persons in the premier institutes. But, those who practice the pattern for more than 2 years and then, show their excellence over junior by way of extra practice. It was always criticized that the pattern and syllabus of IIT JEE is not suitable to be covered within a span of 2 years. But, there are always a lot many students who used to get in IIT JEE in first attempt. Proper guidance, proper time management and dedication towards study is ultimate requirement other than primary requirement of a sharp mind to get in first attempt.

However, the step affected the coaching institution in a big way. As the number of aspirant taking part in the exam reduced drastically for 2007. A new concept came in the market. It was to be The Early Bird. Aim early, take time and then take the shot. It was to start preparing for IIT from 9th standard itself rather than 11th. The concept was not totally new. I remember in 1999 when I was in 9th standard Brilliant Tutorial had a Foundation Correspondence Course for IIT JEE. But, it was not a popular course. Once the director of my coaching class told me that he gets 1 or 2 student each year who comes to join the coaching class to prepare for IIT JEE, where more than 500 students used to enroll in a year. The idea was not so popular as why to put pressure before 10th, if you have enough time after 12th to clear IIT JEE.

Now, after 2006 the concept became popular, may be due to giving popularity by the coaching institute administrators or by the parents who wants their child to be an IITian, but likes to reduce pressure from them. Anyhow, here I’m going to discuss, whether correct time to start the preparation for IIT should start when the aspirant is in 9th standard only.

As far as the positive side is concerned, I see only one benefit, you get much more time to go through every portion of the syllabus. However, I would like to look through all the negative features too.

Self-level is Low

When you have just entered the 9th standard, your level is not adequate to grasp concepts of 11th standard. Even if you are one of the brightest student, it is not going to be easy to understand the concepts of 11th std, leave JEE Advanced standards. But, if you could finish at least 9th std syllabus till 8th. Then, you could think to cover 10th syllabus within months in 9th, say 4 months. Afterwards, study for a year for JEE Advanced. Then, once again start the preparation of 10th, 6 months prior to 10th board. The syllabus of 9th is based on 8th; 10th on 9th; 11th, 12th on 9th & 10th and finally of JEE Advanced on 11th & 12th. It is not a course of the meal which could be ate in any order or a could even be skipped.

First Big Hurdle of Life

Ask any student in school, their first dream in life is to appear and get good marks in 10th board. It is a very important step in life. Many students first time in their life compete with thousands of others in one go. A lot depends on its marks. Before 10th the competition always lies within the boundaries of the school. Those who are ambitious knows the level of their competitor within school. But, 10th board place you with unknown competitors in unknown quantity. Most of the student fear a lot from 10th board than 12th board or any other examinations ahead.

The nervousness for such an important exam is well known. Everything should be perfect and flawless. Hence, it is not easy to divert the concentration and mind from such an important goal.

Young Age

At the age of 13 or 14, a boy is at a very young age to foresee and plan their future. The fun of life will vanish from the life of young kids once they go through the tough preparation of JEE Advanced. They are not matured to take decisions or make strategies. A proper time table with perfect strategy is to be drawn before commencing such preparation.

A Good Counselor

You need a very good counselor who could guide and coach you personally. The steps to be taken needs professional touch with knowledge and understanding of each and every portion of both JEE and 10th.

My Suggestions

If you have decided that you are going to become engineer from a premier institute in India and you can sacrifice your time and can manage the stiff time table. I’m not going to stop you, as “Only Brave Wins the Race”. Success needs talent, aim, dedication, sacrifice, hard work and strategy. Luck could be a factor, but its role could be minimized. I’m going to give a plan of action in detail which would give you an edge over those who are going to start the preparation of JEE Advanced after 10th. I am assuming:

  • You have just gone to 9th std.
  • You are going to attend all the classes in your school.
  • You have 2 years in hand before 10th board.
  • Apart from school you are going to get 6-8 hours of time for self-study. Devote 1-2 to hours at max for school home work. Rest for this plan, min 5 hours.
  • You will get 6 hours of sleep on weekdays and 8-9 on weekend.
  • You are relying on self-study not on coaching or tuition.
  • You are brave and ready to take the pressure. Also, you should be ready to sacrifice fun for study.

If you have any doubts about any of these ask me.

Step 1: Clear 9th and 10th Syllabus

This step is going to be of 5-6 months. In this step, you will cover the syllabus of 9th, then 10th both for Physics, Chemistry and Maths. As I have already said you can’t skip syllabus of any class and look ahead. You have to wrap up the syllabus as fast as you can. Remember, the syllabus would be completed in school too in a span of two years. So, you would get an edge their, which may help you perform better in term exams. Choose the same books which are followed in school. For numerical problems, you should solve each one of them carefully. For conceptual topics, don’t try to mug up concepts, but rather try to give answers to every questions asked at the end of the chapter.

If you could find a senior who could clear your doubts, it would be very good. Discuss the doubts once in every week, preferably on weekend. It would be very good if senior is in 11th or 12th preparing for JEE Advanced. During this step you have to know more and more about the pattern of JEE Advanced. A lot of students fail in clearing JEE Advanced as they spend time in wrong direction misguidedly. The more you know about it, the better it is going to be. You can also read more about JEE on internet.

If you have a group who are also preparing for JEE, discuss with them the topics and understandings. Min. 5 hours each day would be sufficient. If a term exam comes in between, take one week break before term exam and resume after the exam. Your objective here in this step is to cover the concept of 9th and 10th rather than passing 10th board based on it.

Step 2: Get Closer to JEE Level

You must be knowing that the level of JEE Advanced is higher than 12th level. You are not going to study till JEE level before 10th. It should be done after 10th. However, before passing 10th, I would like you to cover as much 11th and 12th syllabus as much as you can. The step should be stopped 6 months prior to your 10th board to give sufficient time for your board exam. You need books followed in 11th and 12th for Physics, Chemistry and Maths for this step. I would not suggest any book. Better to consult any of your senior for the purpose. But, it is important that the book should be for 11th and 12th rather than for JEE Advanced.

Approach for JEE is quite different from 10th. There are not going to be conceptual questions, like explain the extraction of H2SO4 with design of apparatus or What is a magnetic field. It would be all numerical based, except in Organic and Inorganic Chemistry (Chemistry has three parts after 11th; Physical, Organic and Inorganic; Google it to know more). All the questions would be solved based on some information given and concepts you know. Like

  • 2H2 + O2 = ?,
  • Ken is the star of the cross-country team. During a recent morning run, Ken averaged a speed of 5.8 m/s for 12.9 minutes. Ken then averaged a speed of 6.10 m/s for 7.1 minutes. Determine the total distance which Ken ran during his 20 minute jog.

One by one cover the books of 11th and 12th by solving all the problems. No need to solve JEE level problem at this stage. I think the time would be sufficient and you would be able to cover the syllabus of both 11th and 12th within 8-9 months. For the next 3-4 months, go for revision. Once you are reading books of 11th and 12th. Many a times you would feel the lessons at school to be boring and of low level. But, don’t bunk the school. It is going to be helpful to get acquainted with activity at school and to have some fun time.

After this step, you would be well-versed with syllabus of 11th and 12th. Also, you could join a good coaching for JEE Advanced right after appearing for 10th board. You will definitely understand the advance concepts very easily. 

Step 3: Getting ready for 10th Board

In around October, you should start giving full attention towards the approaching 10th board exam, which normally takes placein March. As you have already covered the syllabus till 12th, you would feel very comfortable with 10th syllabus. Make a good strategy and time table and give full concentration towards secondary examination. Forget about IIT, JEE and its syllabus for next 6 -7 months.

After giving your 10th board, you have both the option to go for a good coaching or do self study. If you are going for self study, start from Step 2 in the article How to prepare for IIT JEE?

I’m open for suggestions and discussions. If you like to share something it would be very nice. You can also share your experience with other aspirants. If you have a doubt better to share with everyone, than just me via a personalized email. As it might help others too. Have a nice day.

How to Prepare for JEE 2013 After Appearing for 12th Board:Part 1

Prepare for JEE 2013

Prepare for JEE 2013: Time to Work Harder

The restructuring of AIEEE and IIT JEE in 2013 is creating a lot of confusion among the minds of aspirants. It is very important to clear all the confusion. Read my article What is JEE 2013 to clear all your doubts.

Prepare for JEE 2013: Introduction

You should know that to prepare for JEE 2013, the time after 12th board is very precious. It should be utilized in the optimal way to get the best result. The time period is very short and its optimal utilization will guarantee the best rank that you are capable to achieve by giving your best shot. And, you have to give your best shot.

This time period of almost 70 days is going to decide your career’s fate. You will be among elite group of the society or average. All will depend on your performance in these 70 days. Hence, it is very important to take a systematic approach to maximize the chance of giving your best performance.

Prepare for JEE 2013: For Whom

I’m writing this article for those aspirants of JEE 2013 who are appearing for 12th board and afterwards planning to appear for both JEE (Main) and JEE (Advanced). This article will not address preparation for paper 2 of JEE (Main) or aptitude test of JEE (Advanced). It will be published in two parts; first part will be about preparation for JEE (Main). Second part will address JEE (Advanced) preparation. Keep almost 15-20 different sets of simulator tests for both JEE (Main) and JEE (Advanced). However, before going in detail please go through my article, Most Suitable date for JEE (Main) Online Test.

Prepare for JEE 2013: First Learn Concepts

Some years ago, I had written an article, How to prepare for IIT JEE. The article described three step for IIT JEE preparation. Even though a lot has changed since then in the format of JEE, still first two step are well enough for JEE (Advanced) preparation. I would suggest you go through the article.

I have always told the aspirants of JEE that you don’t need to prepare for the type of the questions asked. You just need to get yourself to the level of knowledge required for IIT JEE. Preparation for a particular type of question  could be done within 20 days.

IIT JEE always keeps changing. Since 2000 I am following it. Every next year there were few changes with respect to previous years. Level of question changed, pattern changed, type of questions changed. This year even the name changed to JEE (Advanced). But, style never changed. IIT always asks tricky questions. An IIT JEE aspirant of year 2000, can appear for the paper of year 2012 and get the same rank, just by preparing for not more than 10 + 20 days (10 days for going through major addition in the syllabus in 2003).

My point in all this is to get the knowledge of every portion of the syllabus before board exam. After board, just prepare for the question type asked in JEE both Main & Advanced. Any question whether, it is asked as subjective or objective is solved in the same way, just presentation of the answer differs. Hence, know how to solve any problem. Adapting according to the requirement of the presentation is not a hard task.

Prepare for JEE 2013: 12th Board is Over

Now, lets proceed to know how to be ready for JEE (Main) once 12th board exam is over. For JEE (Main) or AIEEE, I always feel it is an examination to test your speed rather than intelligence. There would be hardly any tricky questions that would be asked in its exam,. All would be formula based (or memory based). However, JEE (Advanced) or IIT JEE tests your intelligence rather than speed. Moreover, syllabus of JEE (Main) is almost same as that of 12th board. Hence, if someone has prepared well enough for 12th board, he/she could perform well in JEE (Main) after a preparation of 15-20 days.

As I have already told you through my article Most Suitable date for JEE (Main) Online Test, I feel JEE (Main) should be taken online rather than paper based and you should choose the most suitable slot to maximize your performance for both JEE (Main) and JEE (Advanced).

Now, once your board exam is over, take a break of one day and do full-day-night fun. This will totally refresh your mind from the stress of 12th board exam. As per CBSE board, I think the last exam for science stream students would be on 23rd March. It is advised to keep a gap of 15 days between the last day of 12th board exam and JEE (Main) test date. I suggested 10th April, 2013 as the most suitable date to appear for JEE (Main). Hence, those who are going to appear for CBSE board would be getting around 15-16 days for preparation of JEE (Main). After refreshing your mind, we are going to use the simulator tests that I have asked you to collect. It would be better if at least 7-10 simulator tests are computer based.

Step 1 (4-5 day):

Now, initially you need to use the paper based tests. For the first 5 days, start solving the simulator test by using all books, notes and all other means available. But, don’t go through the solution before attempting and possibly solving all the problems. Once you attempted all the questions. Check your answers and if any answer went wrong even after using all possible means. Try to understand where was the problem. Time should not be a factor. However, complete one test in one day.

This process will not be an easy one. On the first 2-3 days, it will take away all the energy. But, if done with concentration and dedication. It will work like anything. If one would go through the questions asked by the AIEEE, one can understand that the questions asked by AIEEE are formula based and could be solved easily if formula is known. This step would help you to know and memorize the formula based on the questions which are being asked by AIEEE. Further, it will revise you the syllabus in accordance with JEE (Main) syllabus. You would know the method for approaching a particular type of problems asked. It would be best if you use past years question paper for this step as simulator test. This will benefit you in the best way, as you will learn, what is asked and exactly how to solve them.

Step 2 (6-7 days):

Once you completed step 1, you would be well versed with the question types asked in AIEEE and how to solve them. I expect it would be almost 10 days left for the JEE (Main).

In this step and next, you have to learn how to attempt the questions in a time bound manner. How to manage and approach the test to score maximum? Both speed and accuracy is important. For the next 9 days sit for the test in the same time schedule in which your JEE (Main) test is. It will help your body to get used to the schedule, so that you won’t fill any physical stress on the final day. It would be best if you attempt the tests on table and chair. I recommend to use the computer based test for both this and the final step. If you don’t have so much computer based tests. Last step should be totally using computer based tests. Rests should be used for this step, along with paper based tests.

For the first 6-7 days, solve the question in the stipulated time schedule. Once the test is over, calculate your marks. Now, take a break of around 1 hour. Afterwards, first try to solve incorrect answers and try to figure out, where you made the mistakes. Next, try to solve the unattempted questions. If you gave the test in first half, then try to solve the unattempted and incorrect ones by the end of the day. If you solve it in second half, try to do so by the next day first half. If you need to refer some books or notes, do so. This whole process will improve your latency and no. of questions attempted.

Step 3 (3 days):

Till now, you would be totally stressed with the heavy workout, I suggested in the first two steps. Now, for the last 3 days, you need to give relaxation to your mind. Out of these 3 days, for the first 2 days, solve the test in the normal schedule as per your JEE (Main) timing. Check your score. But, no need to do the whole other workouts. Its time to relax. Watch TV. Play some games. If you want, for an hour or so, revise the formulas and other things which needs to memorized. But, take no stress. All of us commit errors while solving. However, it is minimized if the stress on the mind is less. The success rate of your attempted questions, makes a huge difference in the score.

I prefer the last day before the exam to be free from any study. Don’t worry. If you don’t solve the test for one day, it will not deteriorate your score. But, it will give your mind some peace. You may spend some time to memorize the formulas. Don’t spend time just watching movies or TVs or just playing games. As doing one thing for long hours will give stress to your mind. Go meet your friends. Spend some time with them. Eat healthy food and sleep at usual time.

On the final day. I expect you will be fully ready to appear for JEE (Main) and give your best shot.

If you have any doubts or queries regrading how to prepare for JEE 2013, feel free to ask. The second part of this article will be published in near future. Keep visiting.

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What is JEE 2013?

JEE 2013

Confusion Among Aspirants about JEE 2013

The whole structure of the two major engineering entrance exam in India changes for the year 2013. After much debate, meetings and suggestions, finally ministry of human resource & development have come up with a plan to enhance the importance of 12th board. Now, the marks of 12th board will not only be a cut-off, instead it will impact the rank.

The sudden change in the whole pattern of admission have created an ambience of confusion among the aspirants. The terms has changed. AIEEE name is missing from the whole process. And, importantly CBSE is organizing one of the two JEE exams.

Lets go through the details of JEE 2013

JEE 2013: AIEEE becomes JEE (Main) and IIT-JEE becomes JEE (Advanced)

The most important change which is creating highest confusion among the aspirants is modification and alteration in the terminology. The engineering entrance exam AIEEE that CBSE used to conduct has been renamed as JEE (Main). Similarly, JAB which used to conduct entrance exam for IIT known as IIT-JEE has been renamed simply as JEE (Advanced).

In order to correlate both IIT JEE and AIEEE, the bigger brand name JEE has been used for both the exam. However, the structure of examination is nearly unchanged for both the exams.

JEE 2013: Weightage for 12th marks

This is the most important change that MHRD wanted in the IIT JEE for years. However, still nothing has changed if IIT JEE is taken into consideration. But, a lot have change for admission to colleges using AIEEE score.

The major reason which was cited in implementation of weightage to 12th board result was variance in the pattern and marks of all the 12th board examination bodies through out the country. The suggested normalization process was always seen as flawed and was resisted from implementation.

This year only admission to NITs, IIITs and other institute which were using AIEEE ranking earlier is going to get affected by the marks of 12th board. After the result of JEE (Main) and 12th board, a ranking will be given by the CBSE with 60 % weightage to JEE (Main) marks and 40 % weightage to 12th board normalized marks. This ranking will be used for admission to NITs and other engineering college for counseling and admission.

As for the IIT-JEE, 12th board result will not impact directly on the ranking. However, a student is required to be in top 20 percentile of their board. Now, the group of words used by the JEE (Advanced) for this eligibility citeria is “admission will be subject to the condition that the candidates are in the top 20 percentile of successful candidate of their boards”.

The use of percentile is very tricky and confusing. Let me explain. Percentile means % of students below you. Percentile starts from 0 and ends to 100. Hence, a top 20 percentile means a percentile greater than or equal to 80. Here, the use of term successful candidate of their board is a very important part which many might ignore. Let me give you an example to explain its importance.

In a board exam 11 students appear, and to be qualified to get a scholarship one needs to be in top 20 percentile of successful candidate, i.e. percentile of 80 or above. Now, the last student who passes will be on zero percentile and topper will be on 100 %. As one must have solved in Arithmetic Progression, the rest students will be equidistant from each other in percentile from 0 to 100.

Now, if all of them gets marks more than passing marks say 35. Then, the 11th position will get zero percentile, then the next one will be 10 percentile, then 20…so on to 100. And, the student with 80, 90 and 100 percentile will get the scholarship.

Now, if one of them either didn’t appear or fail in the exam and rest passes in the exam. Total no. of successful candidate will reduce to 10. Percentile of each students will be 0, 11.11, 22.22……77.77, 88.88, 100. Now, as only those students will be awarded the award which would get percentile of 80 or above. Only top two student will be awarded the scholarship instead of three.

This is the most interesting aspect of the words used by JEE (Advanced) as their criteria. As we see in the example above, even if the third student from the top didn’t do anything wrong and may be even he get the same marks as before. He was not awarded the scholarship.

Normally, if a student is getting a top 20 % rank in his school, which is a good school of his city. It is to be believed that he will be well within top 20 percentiler of his board. However, it is not certain as the percentile will depend on the no. of students passed. If a board is very tough and a lot of students fail in its exam. Even a change of 5 – 10 % success rate of students will hugely impact in the top 20 percentile list. I’m not scaring you. But, keep this aspect in your mind.

Further, whether you score 80 %, 90 % or 95 % in your board exam, it will not change your AIR in JEE (Advanced), neither it will effect in your branch or college. It will be just a bar which you have to clear by a good margin to remove any uncertainty.

Finally, what should be the average percentage of marks required for top 20 percentile. If your board result is not fluctuating much the answer of this question could be found very easily. Ask your school teacher to assist in analyzing your school’s last five year’s result in board exam. The result of your school’s student would not be a perfect sample for whole board. But, even if your school is a good school in the city, expect the bar marks for top 20 percentile in your school for last five years will be better than overall board’s bar mark.

JEE 2013: Structure of the Whole JEE 2013

The exam pattern of both the earlier exams AIEEE and IIT JEE are unchanged even though the names have changed. Whether it is JEE (Main) or JEE (Advanced), nothing related to the exam they conduct has changed. However, both the exams are now inter-related.

One have to fill the form for JEE (Main) till 15 Dec, 2012. Then, they have to sit for the JEE (Main) exam as earlier. The score for JEE (Main) will be declared by  7 May, 2013. However, ranking for admission in colleges through JEE (Main) will be declared on or before 7 Jul,2013. The 12th board appearing candidates have to submit their 12th board roll no. before downloading the admit card for JEE (Main).

CBSE along with the score of JEE (Main) will also declare the status of those who qualify for appearing in JEE (Advanced). After this to appear in the JEE (Advanced), the qualified candidates are required to register themselves at JEE (Advanced) website between 8 May, 2013 and 13 May 2013. The exam fee has to be paid through challan at SBI branches by 13 May, 2013. The written test of JEE (Advanced) will be conducted on 2 Jun, 2013 and result will be declared by 23 Jun, 2013.

It is advised to make a chronological schedule for all the events.

Summary

One thing has certainly changed with JEE 2013. Earlier, one could have just sat for IIT JEE. However, now even if one wants to write only JEE (Advanced). He has to sit and fill the form for both the exams.

On a whole I would say even though pattern of the exams have not changed. But, the end result and parameters for selection have changed. The effect of 12th marks may not effect much on JEE (Advanced). However, I expect this year the authorities are trying to assess the impact of 12th marks normalization. It is just a test for the normalization process. If everything worked fine, then I expect from next year or so 12th board marks will be taken into consideration for JEE (Advanced) AIR too.

If you find anything that I missed to cover in this article feel free to let me know. I would suggest to spread this article among your friends or share it on facebook for the benefit of every aspirants around you.

I’m giving links to articles written by me on similar topics:

  1. Kota: Paradise for IIT JEE Aspirants
  2. Role of Coachings in IIT JEE selection
  3. Hopes Beyond IIT
  4. IIT JEE 2013: What should be the strategy for repeaters?
  5. IIT JEE 2013: What should be Strategy for Partial Droppers?
  6. How to Prepare for IIT JEE 2013?
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Share Market Terminology: Part 2

<<<< Share Market Terminology: Part 1

1.     NASDAQ

The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange located in New York City. “NASDAQ” originally stood for “National Association of Securities Dealers Automated Quotations Systems,” but the exchange’s official stance is that the acronym is obsolete. It is the largest electronic screen-based equity securities trading market in the United States and fourth largest by market capitalization in the world. As of January 13, 2011, there are 2,872 listings. The NASDAQ has more trading volume than any other electronic stock exchange in the world.

NASDAQ has three indices; NASDAQ Composite, NASDAQ-100 and NASDAQ Biotechnology Index. Its market capitalization is US$3.08 trillion (Aug 2010).

2.     Blue Chip

A blue-chip stock is stock in a company with a national reputation for quality, reliability and the ability to operate profitably in good times and bad. The most popular index which follows blue chips is the Dow Jones Industrial Average. The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry.

3.     Book Value

In accounting, book value or carrying value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. Traditionally, a company’s book value is its total assets minus intangible assets and liabilities. However, in practice, depending on the source of the calculation, book value may variably include goodwill, intangible assets, or both.

4.     Market Capitalization

Market capitalization (often market cap) is a measurement of size of a business enterprise (corporation) equal to the share price times the number of shares outstanding (shares that have been authorized, issued, and purchased by investors) of a publicly traded company. As owning stock represents ownership of the company, including all its equity, capitalization could represent the public opinion of a company’s net worth and is a determining factor in stock valuation. Likewise, the capitalization of stock markets or economic regions may be compared to other economic indicators. The total market capitalization of all publicly traded companies in the world was US$51.2 trillion in January 2007 and rose as high as US$57.5 trillion in May 2008 before dropping below US$50 trillion in August 2008 and slightly above US$40 trillion in September 2008.

5.     P/E Ratio

The P/E ratio (price-to-earnings ratio) of a stock (also called its “P/E”, or simply “multiple”) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. P/E reflects the capital structure of the company in question. P/E is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower P/E ratio. The P/E ratio has units of years, which can be interpreted as “number of years of earnings to pay back purchase price”, ignoring the time value of money. In other words, P/E ratio shows current investor demand for a company share.

6.     Spread

The difference between the price paid for a bond (the bid) and the price at which it is offered to an investor (the offer).

7.     Preference Share

Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of liquidation. Like common stock, preference shares represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, preference shares pay a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preference shares are that the investor has a greater claim on the company’s assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders.

8.     Equity share

Equity shares are those shares which are ordinary in the course of company’s business. They are also called as ordinary shares. These shareholders do not enjoy preference regarding payment of dividend and repayment of capital. Equity shareholders are paid dividend out of the profits made by a company. Higher the profits, higher will be the dividend and lower the profits, lower will be the dividend.

9.     Convertible Preference Share

These are preferred issues that the holders can exchange for a predetermined number of the company’s common stock. This exchange can occur at any time the investor chooses regardless of the current market price of the common stock. It is a one way deal so one cannot convert the common stock back to preferred stock.

10. Debenture

The term is used for a medium- to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably with bond, loan stock or note.

Debentures are generally freely transferable by the debenture holder. Debenture holders have no rights to vote in the company’s general meetings of shareholders, but they may have separate meetings or votes e.g. on changes to the rights attached to the debentures. The interest paid to them is a charge against profit in the company’s financial statements.

11. Mutual Fund

An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of mutual funds include diversification and professional money management. Mutual funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment. A closed-end fund is often incorrectly referred to as a mutual fund, but is actually an investment trust. There are many types of mutual funds, including aggressive growth fund, asset allocation fund, balanced fund, blend fund, bond fund, capital appreciation fund, clone fund, closed fund, crossover fund, equity fund, fund of funds, global fund, growth fund, growth and income fund, hedge fund, income fund, index fund, international fund, money market fund, municipal bond fund, prime rate fund, regional fund, sector fund, specialty fund, stock fund, and tax-free bond fund.

12. Open-end Mutual Fund

A fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Open-end funds raise money by selling shares of the fund to the public, much like any other type of company which can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most open-end funds, shareholders are free to sell their shares at any time, although the price of a share in an open-end fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of open-end funds include diversification and professional money management. Open-end funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment.

13. Closed-end Mutual Fund

A fund with a fixed number of shares outstanding, and one which does not redeem shares the way a typical mutual fund does. Closed-end funds behave more like stock than open-end funds: closed-end funds issue a fixed number of shares to the public in an initial public offering, after which time shares in the fund are bought and sold on a stock exchange, and they are not obligated to issue new shares or redeem outstanding shares as open-end funds are. The price of a share in a closed-end fund is determined entirely by market demand, so shares can either trade below their net asset value (“at a discount”) or above it (“at a premium”).

14. Asset Management Company (AMC)

An Asset Management Company (AMC) is an investment management firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives. For a fee, the investment company provides more diversification, liquidity, and professional management consulting service than is normally available to individual investors.

The diversification of portfolio is done by investing in such securities which are inversely correlated to each other. They collect money from investors by way of floating various mutual fund schemes.

15. Front End Load

A sales charge paid when an individual buys an investment, such as a mutual fund, limited partnership, annuity, or insurance policy. The load is clubbed with the first payment made by an investor, so the total initial payment is higher than the later payments. The purpose of a load is to cover administrative expenses and transaction costs and sometimes to discourage asset turnover.

16. Back End Load

A sales charge or commission paid when an individual sells an investment, such as a mutual fund or an annuity, intended to discourage withdrawals.

17. Company

A company is a form of business organization. It is a collection of individuals and physical assets with a common focus and an aim of gaining profits. This collection exists in Law and therefore a company is considered a “Legal Person”.

18. Common Seal

A common seal (sometimes referred to as the corporate seal or company seal) is an official seal used by a company. Company seals were predominantly used by companies in common law jurisdictions, although in modern times, most countries have abrogated the use of seals.

Traditionally, the seal was of some legal significance because the affixing of the seal signified that the document was the act and deed of the company, whereas when a document was merely signed by a director, then that was deemed to be an act carried out on behalf of the company by its agents, which was subject to applicable restrictions and limitations under the ordinary law of agency.

Corporate seals are generally only used for two purposes by corporations today:

Documents which need to be executed as deeds (as opposed to simple contracts), may be executed under the company’s common seal

Certain corporate documents, for example share certificates are often issued under the company seal (and some countries required that share certificates be issued under the common seal)

19. Company Secretary

A company secretary is a senior position in a private company or public organization, normally in the form of a managerial position or above. In the United States it is known as a corporate secretary.

The Company Secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the Board of Directors are implemented.

Despite the name, the role is not a clerical or secretarial one in the usual sense. The company secretary ensures that an organization complies with relevant legislation and regulation, and keeps board members informed of their legal responsibilities. Company secretaries are the company’s named representative on legal documents, and it is their responsibility to ensure that the company and its directors operate within the law. It is also their responsibility to register and communicate with shareholders, to ensure that dividends are paid and to maintain company records, such as lists of directors and shareholders, and annual accounts.

20. Subsidiary Company

A subsidiary, in business matters, is an entity that is controlled by a separate higher entity. The controlled entity is called a company, corporation, or limited liability company; and in some cases can be a government or state-owned enterprise, and the controlling entity is called its parent (or the parent company).

A parent company does not have to be the larger or “more powerful” entity; it is possible for the parent company to be smaller than a subsidiary, or the parent may be larger than some or all of its subsidiaries (if it has more than one). The parent and the subsidiary do not necessarily have to operate in the same locations, or operate the same businesses, but it is also possible that they could conceivably be competitors in the marketplace. Also, because a parent company and a subsidiary are separate entities, it is entirely possible for one of them to be involved in legal proceedings, bankruptcy, tax delinquency, indictment and/or under investigation, while the other is not.

The most common way that control of a subsidiary is achieved, is through the ownership of shares in the subsidiary by the parent. These shares give the parent the necessary votes to determine the composition of the board of the subsidiary, and so exercise control. This gives rise to the common presumption that 50% plus one share is enough to create a subsidiary. There are, however, other ways that control can come about, and the exact rules both as to what control is needed, and how it is achieved, can be complex. A subsidiary may itself have subsidiaries, and these, in turn, may have subsidiaries of their own. A parent and all its subsidiaries together are called a “group”, although this term can also apply to cooperating companies and their subsidiaries with varying degrees of shared ownership.

Subsidiaries are separate, distinct legal entities for the purposes of taxation and regulation. For this reason, they differ from divisions, which are businesses fully integrated within the main company, and not legally or otherwise distinct from it.

Note

This list is being compiled using definitions provided at various sources. I tried my best to give the best general explanation of all the term. If any term need correction or improvement in its explanation, please use the comment section to do so. I will look through it.

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