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Market Psychology & Behavioural Finance

Narrative Fallacy

The tendency to construct coherent stories that explain past events, giving false confidence about their predictability.

Test: a causal story is accepted because it is coherent, without testing whether the same story would have predicted the outcome in advance qualitative Indian Market, Regulation & Taxation

National Stock Exchange

India's largest stock exchange by trading volume, established in 1992 and fully electronic from the outset.

Test: the security is admitted to trading on the NSE, whose benchmark index is the Nifty 50 qualitative Funds, ETFs & Index Investing

Net Asset Value

The per-unit value of a fund, computed as its assets less liabilities divided by units outstanding.

NAV = (Market Value of Assets - Liabilities) / Number of Units Outstanding ₹ Fundamental Analysis & Valuation

Net Debt

Total borrowings less cash and readily realisable investments, measuring debt after the cash available to repay it.

Net Debt = Short-Term Borrowings + Long-Term Borrowings + Lease Liabilities - Cash and Cash Equivalents ₹ crore Financial Statements & Accounting

Net Profit

The profit remaining after every expense, including interest and tax, has been deducted from income.

Net Profit = Profit Before Tax - Tax Expense ₹ crore Fundamental Analysis & Valuation

Net Profit Margin

Net profit as a percentage of revenue, showing what proportion of each rupee of sales the company finally keeps.

Net Profit Margin = Net Profit / Revenue x 100 % Funds, ETFs & Index Investing

New Fund Offer

The initial subscription period during which units of a newly launched scheme are sold, usually at ₹10.

Test: the scheme has no prior track record and units are offered at a fixed initial price during a stated window qualitative Indian Market, Regulation & Taxation

New Tax Regime

India's simplified personal income tax structure with lower slab rates and almost no deductions, now the default.

Taxable Income = Gross Income - the limited deductions permitted; tax computed on the new slab schedule ₹ Indian Market, Regulation & Taxation

Nifty 50

The NSE's benchmark index of 50 large Indian companies, weighted by free-float market capitalisation.

Index Value = (Current Free-Float Market Capitalisation of Constituents / Base Market Capitalisation) x Base Value index points Market Psychology & Behavioural Finance

Noise Trading

Trading on information that carries no genuine signal about value.

Test: the trade is prompted by rumour, pattern or sentiment rather than by information that changes the asset's expected cash flows qualitative Economy, Macro & Market Cycles

Nominal GDP

Gross domestic product measured at current prices, including the effect of inflation.

Nominal GDP = Real GDP x GDP Deflator / 100 ₹ crore Corporate Actions, Dividends & Governance

Nomination and Remuneration Committee

A board committee responsible for recommending director appointments and setting executive pay policy.

Test: the committee consists of non-executive directors with a majority independent, and an independent chair qualitative Financial Statements & Accounting

Non-Controlling Interest

The share of a subsidiary's equity and profit that belongs to shareholders other than the parent company.

Profit Attributable to Owners of the Parent = Consolidated Net Profit - Profit Attributable to Non-Controlling Interests ₹ crore Bonds & Fixed Income

Non-Convertible Debenture

A debenture that cannot be converted into equity and is repaid in cash at maturity.

Test: the instrument carries no conversion right; principal is repaid in cash on the stated date qualitative Financial Statements & Accounting

Non-Current Assets

Assets a company expects to hold and use for more than twelve months, such as plant, buildings, intangibles and long-term investments.

Non-Current Assets = Property, Plant and Equipment + Capital Work in Progress + Intangibles + Long-Term Investments + Other Non-Current Assets ₹ crore Financial Statements & Accounting

Non-Current Liabilities

Obligations not due for settlement within twelve months, principally long-term borrowings, lease liabilities and deferred tax.

Non-Current Liabilities = Long-Term Borrowings + Non-Current Lease Liabilities + Deferred Tax Liabilities + Long-Term Provisions ₹ crore Financial Statements & Accounting

Notes to Accounts

The detailed disclosures accompanying the financial statements that explain accounting policies and break down the summary figures.

Test: the note forms an integral part of the financial statements and is covered by the audit opinion qualitative Orders, Execution & Market Structure

Novation

The legal substitution by which a clearing corporation replaces the original trade with two new contracts, becoming counterparty to both…

Test: one bilateral contract is replaced by two contracts, each with the clearing corporation as the opposite party qualitative Indian Market, Regulation & Taxation

NSDL

The National Securities Depository Limited, the first depository established in India, holding securities in electronic form.

Test: the demat account number is a 16-character alphanumeric identifier beginning with IN qualitative