Monday, 5 May 2014

FIN630 GDB No 1 Solution May 2014

Discussion Questions
1. Why are some securities traded over exchanges while others are traded in Over-the-Counter (OTC) market?
2. Keeping in view the current stage of OTC market in Pakistan, how can the efficiency of OTC market be increased?
Note: Your discussion should not exceed 200 words.
Note:
For acquiring the relevant knowledge, do not rely only on handouts but also watch the course video lectures and read additional material available online or in any other mode.
Important Instructions:
§ Your discussion must be based on logical facts.
§ The GDB will open and close on above specified date and time. Please note that no grace day or extra time will be given for posting comments on GDB.
§ Use the font style “Times New Roman” and font size “12”.
§ Your answer should be relevant to the topic i.e. clear and concise.
§ Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
§ Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references.
§ You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed.
§ Obnoxious or ignoble answer should be strictly avoided.
§ You cannot participate in the discussion after the due date via email.
§ Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.
§ For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VU-LMS.
Note related to load shedding: Please be proactive
Dear students!
As you know that Pre Mid-Term semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.

idea Solution :

In Pakistan the current stage of OTC market is not very mature and it is on a primary level. Mostly OTC markets established 2 to 3 Years ago.
The efficiency of OTC market can be increased by the following means.
  1. An information system is needed, that provide necessary and timely information to investors. Accurate and timely information always create confidence for investing.
  2. Transparency and clarity should be manage in the market. Transparency always help to create an efficient market. 
  3. OTC securities should be categorized clearly by company's own stage. Like established stage, introductory stage, growth stage etc.
  4. Transnational process should be clear, easy and fast.
  5. OTC markets should established some trading standards according to local environment. 
PLEASE DON'T COPY PASTE
TO ENHANCE YOUR ANSWER PLEASE READ THE FOLLOWING DOCUMENT OF ISLAMABAD STOCK EXCHANGE