CBSE Class 11 Syllabus for Foundations of Financial Markets

Foundations of Financial Markets


Time: 3 Hours Marks: 60

Chapter-1: Investment Basics (10 marks)

  • Investment.
  • Reasons to Invest.
  • Time to Invest.
  • Precautions to be take while investing.
  • Meaning of Interest.
  • Factors that determine interest rates.
  • Options available for investment.
  • Short-term financial options available for investment.
  • Long-term financial options available for investment.
  • Stock Exchange.
  • Equity/Share.
  • Debt Instrument.
  • Derivative.
  • Mutual Fund.
  • Index.
  • Depository.
  • Dematerialization.

Chapter-2: Securities (6 marks)

  • Securities.
  • Function of Securities Market.
  • Types of Securities.

2.1 Regulator.

  • 73
  • Need for Regulators.
  • Types of Regulators.
  • SEBI and its role.

2.2 Participants.

  • Participants in the Securities Market.
  • Necessity to transact through an intermediary.
  • Segments of Securities Market.

Chapter-3: Primary Market (6 marks)

  • Role of the ‘Primary Market’.
  • Face Value of a share/debenture.
  • Premium and Discount in a Security Market.

3.1 Issue of Shares.

  • Public Issue.
  • Different kinds of issues.
  • Issue price.
  • Market Capitalisation.
  • Difference between public issue and private placement.
  • Initial Public Offer (IPO).
  • Pricing of an issue.
  • Price discovery through Book Building Process.
  • Difference between offer to shares through book building and offer of shares through normal public
  • issue.
  • Cut-off Price.
  • Floor price in case of book building.
  • Price Band in a book built IPO.
  • Deciding the Price Band.
  • Minimum number of days for which a bid should remain open during book building.
  • System to be used for book building.
  • Allotment to be used for book building.
  • Allotment of shares.
  • Time frame to get the shares listed after issue.
  • Role of a ‘Register’ to an issue.
  • Role of NSE to facilitate IPO.
  • Prospectus.
  • Draft Offer document.
  • Abridged Prospectus.
  • Role of Merchant Bankers.
  • Lock-in.
  • Listing of Securities.
  • Listing Agreement.
  • Delisting of securities.
  • Procedure for filling an Issue by the company.
  • Role of SEBI in an issue.
  • Investor duty.

3.2 Foreign Capital Issuance.

  • Foreign currency resources.
  • American Depository Receipt.
  • Global Depository Receipts.

Chapter-4: Secondary Market (5 marks)

4.1 Introduction.

  • Secondary market.
  • Role of the Secondary Market.
  • Difference between the Primary Market and the Secondary Market.

4.1.1 Stock Exchange

  • Role of a Stock Exchange in buying and selling shares.
  • Demutalisation of stock exchanges.
  • Difference between demutualised exchange different from a mutual exchange.

4.1.2 Stock Trading

  • Screen Based Trading.
  • NEAT.
  • Placing orders with the broker.
  • Access to internet based trading facility Contract Note.
  • Details are required on the contract note issued by the stock broker.
  • Maximum brokerage that a broker can charge.
  • Reasons to trade on a recognized stock exchange.
  • Registration of broker or sub broker.
  • Precautions to be taken before investing in the stock markets.
  • Do’s and Don’ts while investing in the stock markets.

4.2 Products in the Secondary Markets.

  • Types of products dealt in the Secondary Markets.

4.2.1 Equity Investment

  • Reasons to invest in equities.
  • Average return on Equities in India.
  • Factors that influence the price of a stock.
  • Meaning of the terms Growth Stock / Value Stock.
  • Process to acquire equity shares.
  • Bid and Ask Price.
  • Portfolio.
  • Diversification.
  • Advantages of having a diversified portfolio.

4.2.2 Debt Investment

  • Debt Instrument.
  • Features of debt instruments.
  • Interest payable by a debenture or a bond.
  • Segments of the Debt Market in India.
  • Participant in the Debt Market.
  • Credit rating of bonds.
  • Acquire securities in the debt market.

Chapter-5: Derivatives (5 marks)

  • Types of derivatives.
  • Option premium.
  • Commodity exchange.
  • Meaning of commodity.
  • Commodity derivatives market.
  • Difference between commodity and financial derivatives.

Chapter-6: Depository (5 marks)

  • Role of depository similar to a bank.
  • Types of depositories in India.
  • Benefits of participation in a depository.
  • Depository participant (DP).
  • Minimum balance requirement with DP.
  • ISIN.
  • Custodian.
  • Dematerialisation.
  • Dematerialisation of odd lot shares.
  • Features of dematerialised shares.
  • Rematerialisation.
  • Dematerialisation of debt instruments, mutual fund units and government securities.

Chapter-7: Mutual Funds (5 marks)

  • Regulatory body for Mutual Funds.
  • Benefits of investing in Mutual Funds.
  • Risks involved in investing in Mutual Funds.
  • Different types of Mutual Funds.
  • Different investment plans that Mutual Funds offer.
  • The rights that are avlaible to a Mutual Funds holder in India.
  • Fund Offer document.
  • Active fund management.
  • Passive Fund Management.

Chapter-8: Miscellaneous (4 marks)

8.1 Corporate Actions.

  • Corporate Actions.
  • Dividend.
  • Divided yield.
  • Stock Split.
  • Reasons for Stock Split.
  • Buyback of Shares.

8.2 Index.

  • The Nifty Index.

8.3 Clearing & Settlement and Redressal.

  • Clearing Corporation.
  • Rolling Settlement.
  • Pay-in and Pay-out.
  • Auction.
  • Book-closure/Record date.
  • No-delivery period.
  • Ex-dividend date.
  • Ex-date.
  • Resources available to investor/client for redressing his grievances.
  • Arbitration.
  • Investor Protection Fund.

Chapter-9: Concepts & Modes of Analysis (10 marks)

  • Simple Interest.
  • Compound Interest.
  • Time Value of Money.
  • Computation of Time Value of Money.
  • Effective Annual Return.
  • Systematically analyzing a company.
  • Annual Report.
  • Features of an Annual Report.
  • Difference between Balance Sheet and Profit and Loss Account Statements Sources of Funds.
  • Difference between Equity shareholders and Preferential shareholders.
  • Difference between secured and unsecured loans under Loan Funds.
  • Application of Funds.
  • Meaning of ‘Gross block’, ‘Depreciation’, Net Block’ and ‘Capital-Work in Progress’ Current Liabiilties
  • and Provisions and Net Current Assets in the balance sheet.
  • Summarizing balance sheet.
  • Components of Profit and Loss Account statement.
  • Check points for a Profit and Loss Account.

Chapter-10: Ratio Analysis (4 marks)


  • Numeric Speed Accelerator (NSA)
  • Function Key Accelerator (FKA)
  • Trading Skill Accelerator (TSA)
  • Now Simulation Mutual Fund Service System (NSM)


  • Computers.
  • Printer.
  • Software.
  • Manual for Various Software / Assorted Reference Books.
  • Demonstration Stand.
  • Computer Consumable Stationery.
  • LCD Projector.
  • NSE – NLT Module.