NISM Certifications · NISM-Series-XV: Research Analyst · Terminology in Equity and Debt Markets
In equity market terminology, what does the term 'free float market capitalisation' refer to?
Free float market capitalisation is the market value of only those shares available for trading by the public, leaving out promoter and other locked-in or strategic holdings. Many stock indices weight constituents by it to reflect tradable supply.
- AMarket value of only those shares available for public trading, excluding promoter and other locked-in holdingsCorrect
- BMarket value of all issued shares including promoter holdings
- CBook value of shares held by retail investors
- DMarket value of shares traded on a single day
Explanation
Free float market cap multiplies price by the number of shares readily available to public investors, excluding strategic holdings such as promoters. Indices commonly use this method. Full market cap includes all shares.
Did you get it right without looking?
One question tells you little. A timed set on Terminology in Equity and Debt Markets shows your real accuracy, how long you take and where you lose marks.
More Terminology in Equity and Debt Markets questions
- A company's share price is Rs 450 and its book value per share is Rs 150. Which statement correctly describes its price-to-book (P/B) ratio?
- A bond with a face value of Rs 1,000 carries a 9% annual coupon and is currently trading at Rs 900. What is its current yield?
- In bond market terminology, a bond whose coupon rate is lower than its yield to maturity will generally trade at which of the following rela…
- A bond with face value Rs 1,000 pays an annual coupon of 8%. It is bought at Rs 800. What is its current yield?
- A stock has a market price of ₹600, earnings per share of ₹30 and a dividend per share of ₹9. What are its price-earnings ratio and dividend…
- In the equity market, the term 'free float' of a company refers to: