Category: University of Mumbai BMS Notes

The beta (β) of an investment security (i.e. a stock) is a measurement of its volatility of returns relative to the entire market. It is used as a measure of risk and is an integral part of the Capital Asset Pricing Model (CAPM). A company with a higher beta has greater risk and also greater expected returns.

The beta coefficient can be interpreted as follows:

• β =1 exactly as volatile as the market
• β >1 more volatile than the market
• β <1>0 less volatile than the market
• β =0 uncorrelated to the market
• β <0 negatively correlated to the market

Examples of beta

High β: A company with a β that’s greater than 1 is more volatile than the market. For example, a high-risk technology company with a β of 1.75 would have returned 175% of what the market return in a given period (typically measured weekly).

Low β: A company with a β that’s lower than 1 is less volatile than the whole market. As an example, consider an electric utility company with a β of 0.45, which would have returned only 45% of what the market returned in a given period.

Negative β: A company with a negative β is negatively correlated to the returns of the market. For an example, a gold company with a β of -0.2, which would have returned -2% when the market was up 10%.

Equity Beta and Asset Beta

Levered beta, also known as equity beta or stock beta, is the volatility of returns for a stock taking into account the impact of the company’s leverage from its capital structure. It compares the volatility (risk) of a levered company to the risk of the market.

Levered beta includes both business risk and the risk that comes from taking on debt. It is also commonly referred to as “equity beta” because it is the volatility of an equity based on its capital structure.

Asset beta, or unlevered beta, on the other hand, only shows the risk of an unlevered company relative to the market. It includes business risk but does not include leverage risk.

Project Beta

For simplicity throughout previous chapters we have used a general beta factor (b) applicable to the overall systemic risk of portfolios, securities and projects. But now our analysis is becoming more focused, precise notation and definitions are necessary to discriminate between systemic business and financial risk. Table 7.1 summarizes the beta measures that we shall be using for future reference and also highlights a number of problems.

b = total systematic risk, which relates portfolio, security and project risk to market risk.

b = the business risk of a specific project (project risk) for investment appraisal.

bf = the published equity beta for a company that incorporates business risk and systematic financial risk if the firm is geared.

bA = the overall business risk of a firm’s assets (projects). It also equals a company’s

deleveraged published beta (bf) which measures business risk free from financial risk.

bD = the beta value of debt (which obviously equals zero if it is risk-free).

bf„ and bfG are the respective equity betas for similar all-share and geared companies.

When an all-equity company is considering a new project with the same level of risk as its current portfolio of investments, total systematic risk equals business risk, such that:

When a company is funded by a combination of debt and equity, this series of equalities must be modified to incorporate a premium for systematic financial risk. As we shall discover, the equity beta (bE) will be a geared beta reflecting business risk plus financial risk, which measures shareholder exposure to debt in their firm’s capital structure. Thus, the equity beta of an all-share company is always lower than that for a geared firm with the same business risk.

Irrespective of a gearing problem, Table 7.1 reveals a further weakness of the CAPM. A company’s asset beta (bA) should produce a discount rate that is appropriate for evaluating projects with the same overall risk as the company itself. But what if a new project does not reflect the average risk of the company’s assets? Then the use of bA is no more likely to produce a correct investment decision than the use of a WACC calculation.

To illustrate the point, Figure 7.1 graphs the Security Market Line (SML) to show the required return on a project for different beta factors, with a company’s WACC. The use of the overall cost of capital to evaluate projects whose risk differs from the company’s average will be sub-optimal where the IRR of the project is in either of the two shaded sections. To calculate the correct CAPM discount rate using Equation (45), we must determine the project beta.

Figure 7.1: The SML, WACC and Project Betas

The company’s average beta, shown in the diagram, provides a measure of risk for the firm’s overall returns compared with that of the market. However, management’s investment decision is whether or not to invest in a project. So, like the WACC, if the project involves diversification away from the firm’s core activities, we must use a beta coefficient appropriate to that class of investment. The situation is similar to a stock market investor considering whether to purchase the shares of the company. The individual would need to evaluate the share’s return by using the market beta in the CAPM.

Even if diversification is not contemplated, the project’s beta factor may not conform to the average for the firm’s assets. For example, the investment proposal may exhibit high operational gearing (the proportion of fixed to variable costs) in which case the project’s beta will exceed the average for existing operations.

A serious conflict (the agency problem) can also arise for those companies producing few products, or worse still a single product, particularly if management approach their capital budgeting decisions based on self-interest and short-termism, rather than shareholder preferences. Shareholders with well-diversified corporate holdings who dominate such companies may prefer to see projects with high risk (high beta coefficients) to balance their own portfolios. Such a strategy may carry the very real threat of bankruptcy but in the event may have very little impact their overall returns. For corporate management, the firm’s employees and its suppliers, however, the policy may be economic suicide.

Fortunately, if a beta is required to validate the CAPM for project appraisal, help is at hand. Management can obtain factors for companies operating in similar areas to the proposed project by subscribing to the many commercial services that regularly publish beta coefficients for a large number of companies, world wide. Their listings also include stock exchange classifications for industry betas. These are calculated by taking the market average for quoted companies in the same industry. Research reveals that the measurement errors of individual betas cancel out when industry betas are used. Moreover, the larger the number of comparable beta constituents, the more reliable the industry factor.

So, if management wish to obtain an estimate for a project’s beta, it can identify the industry in which the project falls, and use that industry’s beta as the project’s beta. This approach is particularly suitable for highly diversified and divisionalised companies because their WACC or market beta would be of little relevance as a discount rate for its divisional operations.

As an alternative to stock market data, management can also estimate a project’s beta from first principles by calculating its F-value.

The F-value of a project is rather like a beta factor in that it measures the variability of a project’s performance, relative to the performance of an entity for which a beta value exists.

The entity could be the industry in which the project falls, the firm undertaking the project, or a division within the firm that is responsible for the project.

A project’s F-value is defined as follows:

As a result, we can obtain an estimate of a project’s beta through one of three routes:

Portfolio Beta

Calculating the volatility, or beta, of your stock portfolio is probably easier than you think. A beta of 1 means that a portfolio’s volatility matches up exactly with the markets. A higher beta indicates great volatility, and a lower beta indicates less volatility. To do it, you’ll need to know the percentage of your portfolio by individual stock and the beta for each of those stocks.

The first step is to multiply the percentage of your portfolio and the beta for each individual stock. Once that is done, simply add up the results and you’ll have your portfolio beta.

This method is a simple weighted average calculation. It’s an easy way to quickly assess your entire portfolio’s volatility. It only works though if the individual stock’s betas are calculated correctly and comparably. Using a six month time period to calculate one stocks beta and a six year period to calculate the other will give you a much different result than using the same time period across the board. Likewise, it’s wise to use the same index for each individual stock’s beta so that your portfolio beta will have consistency with that index as well. For most portfolios, the S&P 500 is a reasonable index to start with.

It’s not required to use the same time period and index for each stock, but it is important to understand how differences in each individual stock’s beta will impact the result for your entire portfolio.

An investment bank is a financial services company or corporate division that engages in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services (fixed income instruments, currencies, and commodities). Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses. As an industry, it is broken up into the Bulge Bracket (upper tier), Middle Market (mid-level businesses), and boutique market (specialized businesses).

Investment banking is the division of a bank or financial institution that serves governments, corporations, and institutions by providing underwriting (capital raising) and mergers and acquisitions (M&A) advisory services. Investment banks act as intermediaries between investors (who have money to invest) and corporations (who require capital to grow and run their businesses).

All investment banking activity is classed as either “sell side” or “buy side”. The “sell side” involves trading securities for cash or for other securities (e.g. facilitating transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.). The “buy side” involves the provision of advice to institutions that buy investment services. Private equity funds, mutual funds, life insurance companies, unit trusts, and hedge funds are the most common types of buy-side entities.

Full-service banks offer the following services:

• Underwriting: Capital raising and underwriting groups work between investors and companies that want to raise money or go public via the IPO process. This function serves the primary market or “new capital”.
• Mergers & Acquisitions (M&A): Advisory roles for both buyers and sellers of businesses, managing the M&A process start to finish.
• Sales & Trading: Matching up buyers and sellers of securities in the secondary market. Sales and trading groups in investment banking act as agents for clients and also can trade the firm’s own capital.
• Equity Research: The equity research group research, or “coverage”, of securities helps investors make investment decisions and supports trading of stocks.
• Asset Management: Managing investments for a wide range of investors including institutions and individuals, across a wide range of investment styles.

Underwriting Services in Investment Banking

Underwriting is the process of raising capital through selling stocks or bonds to investors (e.g., an initial public offering IPO) on behalf of corporations or other entities. Businesses need money to operate and grow their businesses, and the bankers help them get that money by marketing the company to investors.

There are generally three types of underwriting:

• Firm Commitment: The underwriter agrees to buy the entire issue and assume full financial responsibility for any unsold shares.
• Best Efforts: Underwriter commits to selling as much of the issue as possible at the agreed-upon offering price but can return any unsold shares to the issuer without financial responsibility.
• All-or-None: If the entire issue cannot be sold at the offering price, the deal is called off and the issuing company receives nothing.

Role

Investment Banks serve as an intermediary between investors and corporations. It helps corporations by pricing securities resulting in maximization of revenue. Investment banks help their clients in meeting regulatory requirements while raising capital as well.

When companies issue IPO, an investment bank may buy all the shares from the company and will sell it in the market as a proxy company. It helps the company in contracting out the IPO to the investment bank itself. It provides advisory services in relation to underwriting services and mergers and acquisitions.

Objectives

In the past, the primary objective of investment banking was to bridge the gap between investors and corporations, individuals, government bodies who needed funds to grow and run their business. 

But nowadays, there is no defined limit on the activities that fall in the purview of investment banking. Apart from underwriting and merger & acquisition-related advisory services, investment banks also provide different kinds of ancillary services to their clients like equity trading, market-making, facilitation of transactions, derivative trading, assistance in the analysis of risk associating with managing big projects.

Functions of Investment Banking

• Acts as an intermediary between investors and the company.
• It helps companies in raising capital.
• Provide advisory services for underwriting and merger & acquisition.
• Provide ancillary services like equity, derivative trading, facilitating transactions, market-making, promotion of securities, etc.

Importance of Investment Banking

• In a growing economy where all the companies want to raise capital through stock and shares, Investment Bank with their expertise helps these companies by providing underwriting services, so that businesses can maximize their revenue while staying within the regulatory requirement.
• They provide other ancillary advisory services as well to their clients. Therefore, in a nutshell, these organizations play a pivot role by helping corporate, individuals, and government bodies.
• With their expertise, they help in the growth of the local, national, and the global economy as a whole.

Equity Mutual Funds can be categorized based on the market capitalization of the companies they invest in. They can be classified into three types, large-cap, mid-cap, and small-cap funds. In this article, we will look at understanding these funds and talk about the difference between small-cap, large cap and mid cap funds.

Market Capitalization, in simple words, is the market value of the company’s outstanding shares. It is not the share price but the value of the share.

Number of outstanding shares x share price

Based on the market cap, companies are classified as large-cap companies, mid-cap companies, and small-cap companies. In order to ensure that equity schemes follow uniform norms for defining large, mid, and small caps, the Securities and Exchanges Board of India (SEBI) has defined them as follows:

• Large-cap companies: 1st to 100th company in terms of market capitalization
• Mid-cap companies: 101st to 250th company in terms of market capitalization
• Small-cap companies: 251st company onwards in terms of market capitalization

It is important to note that since the share price keeps fluctuating, the market cap of a company keeps changing too. Also, when a company issues more shares to the public, it’s market capitalization increases. On the other hand, in the case of a buyback, the market cap dips. Having understood, market cap, let’s look at large, mid, and small-cap funds.

Large Cap funds are open-ended, equity funds which invest at least 80% of their total assets in large-cap stocks. Large-cap companies are trustworthy and strong companies with an excellent track record. They are known to have generated wealth for their investors.

Mid-cap funds are open-ended, equity funds which invest around 65% of their total assets in equity and equity-related instruments of mid-cap companies. These companies have been around for quite some time and have a good track record too. Some of these will soon transform into large-cap companies. This makes the mid-cap segment an interesting one for growth opportunities with controlled risks.

Small-cap funds are open-ended equity funds which invest a minimum of 65% of their total assets in small-cap stocks. These are the smaller companies or the new entrants in the market. These funds have a high potential for growth but also carry a high amount of risk. They are usually recommended for investors with higher risk tolerance.

Here are some key differences between large-cap, mid-cap, and small-cap funds.

The term investment refers to exchange of money wealth into some tangible wealth.  The money wealth here refers to the money (savings) which an investor has and the term tangible wealth refers to the assets the investor acquires by sacrificing the money wealth. By investing, an investor commits the present funds to one or more assets to be held for some time in expectation of some future return in terms of interest or capital gain. Investment can be defined as commitment of funds that is expected to generate additional money.

The term Investment Environment encompasses all types of investment opportunities and the market structure that facilities buying and selling these investments. Different types of securities, institutional set-up and the market intermediaries are the components of investment environment.

Market prices / rates are volatile and this is the chief risk faced in financial / real asset markets and this takes place in the investment environment.

The investment environment is the international economy and the domestic economy, developments in which have an effect on the values (prices) of the assets of the asset classes. It is well known that the prices of financial assets, particularly shares, can be extremely volatile, and this introduces the element of risk in financial markets. Investment risk is broadly defined as volatility in asset prices and it is measured in these terms.

Ultimately, gross domestic product (GDP) growth is the major driver of asset prices, and asset price changes (positive and negative) are often exacerbated by the irrational behavior of participants in the investment arena (known as the “herd instinct”). GDP is driven by gross domestic expenditure (GDE) and the trade account balance (TAB). GDE is driven by the consumption expenditure (C) and investment expenditure (I) of the private and government sectors, such that C + I = GDE. This is domestic demand. Foreign demand for local products is reflected in exports (X) while imports (M) reflect domestic demand for foreign goods. So, X – M = TAB = net foreign demand. The “big picture” (the entire economy) is complete:

C+I = GDE

GDE + TAB = GDP

Given asset price volatility, fund managers (or “investment houses”) and broker-dealers (who service the fund managers) employ the services of investment analysts and specialist economists to anticipate future asset price developments. The investment analysis process they undertake has four parts, as presented in Figure 8.

It is a well know fact that asset class allocation is the most critical decision made in asset management. It is responsible for a significant proportion of asset / portfolio performance (some analysts say up to 80%). Asset class allocation is critically based on macroeconomic (domestic and international) analysis. In this regard we conclude with a relevant view of an asset manager:

“All investment decisions, particularly those relating to asset allocation, implicitly or explicitly rest on some forward-looking macro-economic assumption. Any change to the macro-economic assumption will inevitably influence the intrinsic or fair value of that investment or asset class. For example, a decision to buy long-term government bonds is based on some assumption about future inflation; if the investor assumed low future inflation and the outcome is high inflation, the value of such an investment would turn out to be dramatically lower than anticipated.

Figure 8: investments analysis: four steps

“One pillar of our investment philosophy is the recognition that the economic future could easily turn out to be very different from the assumptions. Overconfidence in their ability to read the future is a classic mistake made by investors. We guard against this risk by incorporating more than one economic scenario into our investment strategy.

“We consider as wide a range of potential economic scenarios as possible. From these possibilities we typically choose two or three scenarios that we believe cover a significant range of potential outcomes. In this way we acknowledge and mitigate the risk attached to an uncertain, and often unpredictable, future.

“For each economic scenario we make assumptions about short and long-term interest rates, and about economic growth and inflation, both locally and internationally. Using these economic assumptions as our basic input, we estimate the intrinsic or fair value of each asset class that we explore.

“The scenarios have a strong international flavor. In a globalizing world, with integrated financial markets, we believe international influences will dominate over time. The scenarios are projected over rolling five-year periods, a time frame typically used by most successful long-term investors.

“We attach probabilities to each scenario. The use of probabilities skews the macro-economic input in the direction that we believe is the most likely outcome. This means that our investment strategy is based on a core macro-economic view, although the element of future surprise is minimized through the incorporation of various scenarios.

“Another pillar of our philosophy is diversification across a range of asset classes. Diversification also hedges our investment strategy against the potential for the future to surprise.”

The last mentioned, i.e. diversification, is one of the pillars of asset management; it is given some attention in a later following section.

If you are into the stock, bond, or currency market, you can trade them online and at your convenience. Online trading refers to buying or selling of the financial products through a trading platform that is online. The platform works through the Internet-based brokers and is available for anyone who wants to make money from the market. All you need to do is carry out research of the market and educate yourself about each product, steps to place the order, and how to make a profit on the same. You will not have to leave your home or speak to a broker once you understand the online trading benefits.

Important Advantages of Online Trading

important benefits of online trading to help you get a clear insight.

• Convenience

First and foremost, anything that can be done online will make your life convenient. When it comes to online trading, you will only have to open a trading account using the Internet and you can then start trading. There is no need to visit the bank or call an agent for the same. As long as you have an internet connection and an online account, you are good to go. Online trading is super convenient and there is no hassle, as it saves your time and efforts.

• Low Cost

Another top benefit of online trading is the low cost. When you work through a stockbroker, you pay a fee or a commission, which is charged as per the traditional method. However, in the case of online trading, you pay a fee, which is much lower than the one charged by the brokers. If you trade in large volume, you can negotiate the fees of the broker and bring down the cost.

• Manage Your Portfolio Easily

Through online trading, you can easily buy or sell the shares as per your convenience. The online trading portal has an advanced interface, which allows you to see how your portfolio is performing and this can help evaluate the profit or loss on the investment.

• No Middleman

With online trading, you need not work with direct brokers. This reduces the cost of trading and makes the entire process hassle-free. Online trading makes the service lucrative and convenient for you.

• Better Control

As an investor, you seek higher control over the portfolio, and you achieve the same through online trading. You can trade anytime you wish to and will not have to contact a broker to process a transaction. Online trading will help you make instant transactions and you will be able to review the same at your comfort. You will not have to speak to a broker in an attempt to get the best bet on your money. You will have complete control over the investment and you will be able to make decisions with regard to buying and selling the stock with minimal interference.

• Immediate Transactions

One of the biggest online trading benefits is the speed and efficiency. It is possible to transfer the funds between two accounts and ensure that there is no delay in the same. You can make a transaction through a single click and buy or sell the stocks or bonds. You can make a quick transaction and generate faster earnings.

Gain a Deeper Understanding of Your Money

One of the hidden advantages of trading online is to gain a deeper and better understanding of the money. You can predict the behavior of the stock market and understand if it will rise or fall. Based on the same, you can handle the finances and manage it accordingly. You can become experienced in the market and make the most of good investment opportunities. You can also take a look at your portfolio and understand how your decisions are generating money for you. This knowledge about your finances will be useful to you and you will become financially strong and stable.

There is no denying the fact that online trading is much more beneficial as compared to the traditional form of trading. You need to start by defining your investment goals and gaining an understanding of the market. Once you understand how online trading works, you will be able to make better financial decisions and ensure that your portfolio grows over a long period of time.

Penny stocks are a form of market traded security which attracts minimal pricing. These securities are mostly offered by companies with lower market capitalisation rates. Therefore, these are also called nano-cap stocks, micro-cap stocks, and small-cap stocks, depending on the company’s market capitalisation.

A company’s market capitalisation rate is determined based on the product of the current price of its shares or stocks and the number of outstanding shares i.e. NAV of shares x number of outstanding stocks.

Based on this factor, companies are indexed in recognised stock exchanges such as National Stock Exchange and Bombay Stock Exchange. Penny stock lists are often found in the lower sections of such stock exchanges or lesser-known stock exchanges.

The features of penny stocks are listed below:

• High-returns: These stocks provide much higher returns compared to other forms of securities. As such shares are issued by small and micro-cap companies, they have vast potential for growth. Consequently, penny stocks are risky, given its intensity of response to market fluctuations.
• Illiquid: Penny stocks in India are illiquid in nature, given the fact that the companies issuing them are relatively unpopular. It becomes challenging to find individuals who are willing to purchase these stocks, thus offering little aid during emergencies.
• Low-cost: In India, penny stocks are usually priced lower than Rs. 10. Therefore, you could purchase a substantial amount of stock units from penny stock list with a small scale investment.
• Unpredictable pricing: Penny stocks might not attract adequate pricing during the sale. It might result in a lower or non-existent profit margin. Similarly, these stocks could also attract a price significantly higher than your cost; therefore, resulting in a considerable profit.

Penny stocks should be included in your portfolio. Here are the following reasons as to why:

• Multibagger:

Some of these stocks have the potential to evolve into multi-baggers. It means shares which yield in multiples of the investment amount. If specific security reaps double its investment amount, it is called a double-bagger, and if it returns ten times its investment value, it is considered a ten-bagger.

Including them in your portfolio could exponentially increase your return prospects and might outperform the large and mid-cap funds. However, conduct thorough research into the penny stocks list to gauge which stocks have the potential to be multibaggers.

• Inexpensive:

Investing in these stocks is comparatively cheaper. Hence, you can invest in them without losing any significant portion of your investment finances. Allotting a small portion of your portfolio to purchase the best penny stocks for 2019 in India would still allow you the leeway to invest in other, more secure investment options while considerably reducing the risk factor associated.

Forms of risks associated with penny stocks. These are:

• Limited information: Given the fact that companies issuing penny stocks are start-ups, there exists a dearth of information on their financial soundness, past performance, growth prospects, etc. Individuals might end up investing in them half-wittingly. Therefore, conduct thorough research into the list of penny stocks in India before investing.
• Scams: Penny stock scams are commonplace in international financial history. One such popular method is “Pump and Dump”. Companies and scammers purchase a considerable amount of penny stocks resulting in value inflation which attracts other investors to follow the hype.

The Nasdaq Stock Market, also known as Nasdaq or NASDAQ, is an American stock exchange located at One Liberty Plaza in New York City. It is ranked second on the list of stock exchanges by market capitalization of shares traded, behind only the New York Stock Exchange. The exchange platform is owned by Nasdaq, Inc., which also owns the Nasdaq Nordic stock market network and several U.S. stock and options exchanges.

Nasdaq is a global electronic marketplace for buying and selling securities. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy and transparent system, and commenced operations on February 8, 1971. The term, “Nasdaq” is also used to refer to the Nasdaq Composite, an index of more than 3,000 stocks listed on the Nasdaq exchange that includes the world’s foremost technology and biotech giants such as Apple, Google, Microsoft, Oracle, Amazon, and Intel.

Origins of Nasdaq

Nasdaq officially separated from the NASD and began to operate as a national securities exchange in 2006. In 2007, it combined with the Scandinavian exchange group OMX to become the Nasdaq OMX group, which is the largest exchange company globally, powering 1 in 10 of the world’s securities transactions.

Headquartered in New York, Nasdaq OMX operates 25 markets – primarily equities, and also including options, fixed income, derivatives and commodities – as well as one clearinghouse and five central securities depositories in the U.S. and Europe. Its cutting-edge trading technology is used by 70 exchanges in 50 countries. It is listed on the Nasdaq under the symbol NDAQ and has been part of the S&P 500 since 2008.

The Nasdaq computerized trading system was initially devised as an alternative to the inefficient “specialist” system, which had been the prevalent model for almost a century. The rapid evolution of technology has made the Nasdaq’s electronic trading model the standard for markets worldwide.

As a leader in trading technology from the outset, it was only fitting that the world’s technology giants chose to list on the Nasdaq in their early days. As the technology sector grew in prominence in the 1980s and 1990s, the Nasdaq became the most widely followed proxy for this sector. The technology and dot-com boom and bust of the late 1990s is exemplified by the rise and fall of the Nasdaq Composite during this period. The index crossed the 1,000 mark for the first time in July 1995, soared in the following years and peaked at over 4,500 in March 2000, before slumping almost 80% by October 2002 in the subsequent correction.

Recent History of Nasdaq

In February, 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Börse, speculation developed that NASDAQ OMX and Intercontinental Exchange (ICE) could mount a counter-bid of their own for NYSE. At the time, NYSE Euronext’s market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion. Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Mercantile Exchange to join in what would probably have to be, if it proceeded, an $11–12 billion counterbid.

The European Association of Securities Dealers Automatic Quotation System (EASDAQ) was founded as a European equivalent to the Nasdaq Stock Market. It was purchased by NASDAQ in 2001 and became NASDAQ Europe. Operations were shut down, however, as a result of the bursting of the dot-com bubble. In 2007, NASDAQ Europe was revived as Equiduct, and it is currently operating under Börse Berlin.

On June 18, 2012, Nasdaq OMX became a founding member of the United Nations Sustainable Stock Exchanges initiative on the eve of the United Nations Conference on Sustainable Development. In November 2016, Nasdaq Chief Operating Officer Adena Friedman was promoted to the role of CEO, becoming the first woman to run a major exchange in the U.S. In 2016, Nasdaq earned $272 million in listings-related revenues.

Nasdaq achieved its highest-ever close on August 29, 2018, when its index peaked at 8109.69. In 2018, it was announced that the Nasdaq was planning to introduce cryptocurrency futures the next year in conjunction with a prominent investment firm.

Stress management starts with identifying the sources of stress in your life. This isn’t as easy as it sounds. Your true sources of stress aren’t always obvious, and it’s all too easy to overlook your own stress-inducing thoughts, feelings, and behaviors. Sure, you may know that you’re constantly worried about work deadlines. But maybe it’s your procrastination, rather than the actual job demands, that leads to deadline stress.

To identify your true sources of stress, look closely at your habits, attitude, and excuses:

• Do you explain away stress as temporary (“I just have a million things going on right now”) even though you can’t remember the last time you took a breather?
• Do you define stress as an integral part of your work or home life (“Things are always crazy around here”) or as a part of your personality (“I have a lot of nervous energy, that’s all”).
• Do you blame your stress on other people or outside events, or view it as entirely normal and unexceptional?

Until you accept responsibility for the role you play in creating or maintaining it, your stress level will remain outside your control.

Start a stress journal

A stress journal can help you identify the regular stressors in your life and the way you deal with them. Each time you feel stressed, keep track of it in your journal. As you keep a daily log, you will begin to see patterns and common themes. Write down:

• What caused your stress (make a guess if you’re unsure).
• How you felt, both physically and emotionally.
• How you acted in response.
• What you did to make yourself feel better.

Look at how you currently cope with stress

Think about the ways you currently manage and cope with stress in your life. Your stress journal can help you identify them. Are your coping strategies healthy or unhealthy, helpful or unproductive? Unfortunately, many people cope with stress in ways that compound the problem.

Unhealthy ways of coping with stress

These coping strategies may temporarily reduce stress, but they cause more damage in the long run:

• Smoking
  • Drinking too much
  • Overeating or undereating
  • Zoning out for hours in front of the TV or computer
  • Withdrawing from friends, family, and activities
  • Using pills or drugs to relax
  • Sleeping too much
  • Procrastinating
  • Filling up every minute of the day to avoid facing problems
  • Taking out your stress on others (lashing out, angry outbursts, physical violence)

Learning healthier ways to manage stress

If your methods of coping with stress aren’t contributing to your greater emotional and physical health, it’s time to find healthier ones. There are many healthy ways to manage and cope with stress, but they all require change. You can either change the situation or change your reaction. When deciding which option to choose, it’s helpful to think of the four As: avoid, alter, adapt, or accept.

Since everyone has a unique response to stress, there is no “one size fits all” solution to managing it. No single method works for everyone or in every situation, so experiment with different techniques and strategies. Focus on what makes you feel calm and in control.

Dealing with Stressful Situations: The Four A’s

Change the situation:

• Avoid the stressor.
• Alter the stressor

Change your reaction:

• Adapt to the stressor.
• Accept the stressor.

Pranayama

Pranayama state as “control of breath” calms the disturbed pattern of breathing which agitates the mind and senses. It is an important therapeutic method for promoting healing on all levels.

Mind and breath are linked together like a bird with two wings. In the same manner breath can be used as a rope to tie down the mind. If we concentrate on the breath, the mind becomes internalized. The process of Pratyahar means withdrawal from the senses and its external orientation on the outer world and made to turn inward. In this ways Pranayama is one of the best means of Pratyahar.

Awareness of breath is a door to the deeper levels of the mind. As the mind focuses on the breath, the deeper layers of consciousness gradually open, releasing the subconscious and all that is hidden within. The process of mind draws more energy during Pranayama, deeper thoughts come up, and emotional issues helps to deal or sit in meditation or their energy will disturb us and prevent us from going deeper. It should be never be attempted willfully or forcefully but as part of a process of deepening inner peace and equanimity. To deal with it properly requires the proper foundation of Yamas and Niyamas first.

Mantras

Mantra meditation is one of the simplest and easiest-to-learn meditation techniques. Like other forms of meditation, it can change your stress levels at the moment with a single session or can change the way you manage stress from now on with repeated practice. And it has the benefit of being simple to learn and customize to meet your specific needs for stress management.

Benefits of Mantra Meditation

If you are reading this, you have probably already heard that meditation is a powerhouse of a stress reliever because of all of the ways it can improve your outlook and overall health. 

Meditation has been linked to a reduction of chronic stress as well as decreases in heart rate and blood pressure, an increase in immune system functionality, and many other benefits.

Mantra meditation, in particular transcendental meditation, has also been linked with a decrease in intrusive thoughts, and an increase in meaning and quality of life in HIV patients.

 It has been linked to reduced stress, anxiety and anger and increases in quality of life in nurses. Another study on veterans found that mantra meditation reduces the occurrence of intrusive thoughts and minimizes stress as well.2 Many people find that mantra meditation is simpler to master when they are starting out because it provides an empowering focal point; many people find it difficult to keep redirecting their thoughts to the present moment and instead feel that it is easier to have something more specific to grasp onto.

The bottom line is, with mantra meditation, you may feel less stressed after one session. With repeated practice, you may find yourself less reactive to future stress. Practicing mantra meditation is easy. Here’s how:

1. Set Aside a Few Minutes and Get into a Comfortable Position

• At first, it’s best to have a quiet room, free of distractions. With repeated practice, you may find yourself able to practice mantra meditation anywhere and under more chaotic circumstances.

2. Choose a Mantra for Meditation

• A mantra is a word or phrase that you repeat to yourself out loud or silently. It can be a more classically significant spiritual word like the Hindu, ‘Aum,’ (aka Om) or it can be a word or phrase like, ‘Calm’ or ‘I am at peace.’ The words or sounds you choose aren’t important as long as they are simple and comfortable for you to repeat.

3. Close Your Eyes and Repeat Your Mantra to Yourself

• As you do so, try to focus only on the sound and feel of your mantra and nothing else. If you find other thoughts creeping into your head, thank yourself for noticing, and gently redirect your attention to your mantra.

4. Continue for Several Minutes

• That’s it. Just continue to repeat your mantra and focus on the sound and the way it feels to make the sound. Redirect your attention away from distractions, and back to your mantra. You can start with 5- or 10-minute sessions and work up to 20 or 30; with mantra meditation, any practice time is better than none.

Nutrition

Good nutrition is an important stress management tool. When our bodies are poorly fed, stress takes an even greater toll on our health. Nutrition and stress are interlinked. Here are some tips to eat well for academic success:

• Eat regularly. Your brain needs glucose to work at its best. Eating regularly throughout the day helps keep your blood glucose stable. Studies have shown that more stable blood sugar levels are associated with better academic performance.
• Get your healthy fats. Omega-3 fatty acids found in walnuts, flax seed and fish oil are associated with brain function. Deficiencies of this fatty acid can result in depression and/or anxiety.
• Eat your veggies. Fruits and vegetables contain vitamins and minerals like copper, zinc, manganese, and vitamins A, E and C. Leafy greens are especially good for you. These vitamins and minerals work to neutralize harmful molecules produced when your body is under stress.
• Add high-fiber foods. High fiber intake has been associated with greater alertness and decreased perceived stress. So add fiber-rich foods like oatmeal, nuts, beans, fruits and vegetables to your diet.
• Trade caffeine for more sleep. Caffeine leads to increased blood pressure and may make you anxious, especially if you are already prone to anxiety. While consuming caffeine may seem to help you concentrate better, some studies show that caffeine only restores what is lost through lack of sleep. Instead of turning to caffeine, try the natural grade booster – sleep!
• Stock up on healthy snacks. If you know that a stressful or busy time is approaching, prepare by stocking up on quick, healthy snacks. Healthy snacks are high in protein and/or fiber. Some examples are low fat granola, almonds, peanuts, carrots with hummus or yogurt with fresh fruit.

Music

The soothing power of music is well-established. It has a unique link to our emotions, so can be an extremely effective stress management tool.

Listening to music can have a tremendously relaxing effect on our minds and bodies, especially slow, quiet classical music. This type of music can have a beneficial effect on our physiological functions, slowing the pulse and heart rate, lowering blood pressure, and decreasing the levels of stress hormones. Music, in short, can act as a powerful stress management tool in our lives.

As music can absorb our attention, it acts as a distraction at the same time it helps to explore emotions. This means it can be a great aid to meditation, helping to prevent the mind wandering.

Musical preference varies widely between individuals, so only you can decide what you like and what is suitable for each mood. But even if you don’t usually listen to classical music it may be worth giving it a try when selecting the most calming music.

When people are very stressed, there is a tendency to avoid actively listening to music. Perhaps it feels like a waste of time, not helping to achieve anything. But as we know, productivity increases when stress is reduced, so this is another area where you can gain vast rewards. It just takes a small effort to begin with.

To incorporate music into a busy life, try playing CDs in the car, or put the radio on when in the bath or shower. Take portable music with you when walking the dog, or put the stereo on instead of the TV. A person with clinical depression or bipolar disorder might listen to music to help with their worst, lowest moods.

Singing (or shouting) along can also be a great release of tension, and karaoke is very enjoyable for some extroverts! Calming music before bedtime promotes peace and relaxation and helps to induce sleep.

Research on Music

Music has been used for hundreds of years to treat illnesses and restore harmony between mind and body. But more recently, scientific studies have attempted to measure the potential benefits of music.

The word meditation is derived from the Latin word Meditari, meaning “to think, “contemplate”, “devise”, or “ponder”. Today, meditation has become extremely popular all over the world. In general, most of the time it has been used to reduce stress, to promote wellness and healing. There are more than 2500 research studies available on meditation. In the last 200 years, different meditation techniques are derived from the traditional Yoga texts and promoted by the Yoga masters and spiritual leaders.

Although the ultimate goal of meditation is same (calming the mind) the paths are different. However, in the west, meditation is considered as a relaxation technique to promote wellness and healing. The Upanisads emphasis on selfanalysis through intellect and establish the mind on self. Lord Krishna in Bhagavad Geeta says, ‘meditate on the Supreme Self by directing all the senses towards inside using the intellect’. Perhaps, the most profound description of meditation is found in Patanjali Yoga Sutra. Sage Patanjali describes Añöäìga Yoga (eight limbs of Yoga) to realize the ultimate. The sixth and the seventh limb of añöäìga Yoga are pertaining to meditation.

Dharana and Dhyana may be considered as the last two of four stages, which form a continuum in the process and practice of meditation. Hatha Yoga gives the description of the practice of meditation and its benefits. Tantra presents 112 of meditation techniques to realize the ultimate.

Meditation is a distinct practice in Indian philosophy and it is mentioned in many Indian traditional texts. The first description of meditation occurs in Vedas which is one of the oldest scriptures of Hindu culture. Meditation was a part of daily life and known to everyone during Vedic age. Recently, the archaeologists have discovered the sculptures in meditative pose in the ancient civilization, Mohenjo-Daro and Harappa. Specific meditation techniques have been developed for the convenience in the later period.

A restless mind is like a lake, constantly agitated by the winds of desires, creating thought-waves of diverse nature. Because of this constant agitation, our true Self at the bottom of the lake cannot be perceived. To subside all thought-waves, a single thought is consciously cultivated by the repeated and uninterrupted practice of meditation. Then, the lake (mind) becomes calm and bottom of lake (ätman) becomes visible.

Meditation is keeping the mind focused uninterruptedly on a subject for a certain length of time. It is a mental process by which meditator becomes one with the object of meditation. Meditation is the seventh stage in Astanga Yoga of Patanjali.

Meditation is an antidote to stress

• The Neuro chemistry and Neuro physiology of meditation is just the reverse of stress. Stress: Over activity of Sympathetic system.
• Meditation: Over activity of Parasympathetic system.

Caution

• However, it is not a push button system, one need patience. Hence there is a 90 to 95% -drop out rate. One needs to have right guide, right method, correct understanding, appropriate place, constant practice, extreme faith and full conviction.
• Please do not sleep.
• Meditation industry is at height, because of commercialization, so one should be careful.
• Not to make comparisons, all systems are great

It means Meditation is the art of living in the present. Human beings normally choose to recollect past or predict future rather than think about present. This attitude leads to the vicious circle of hopes, failures, regrets and tensions. Meditation leads us to stay with the time thereby keeping us away from past or future.