A) A rise in the prices of shares of all companies registered with Bombay Stock Exchange
B) A rise in the prices of shares of all companies registered with National Stock Exchange
C) An overall rise in the prices of shares of a group of companies registered with Bombay Stock Exchange
D) A rise in price of shares of all companies belonging to a group of companies registered with Bombay Stock Exchange
Correct Answer: C
Solution :
[c] SENSEX is the short form of The Bombay Stock Exchange Sensitive Index. It is composed of 30 of the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India. It's a benchmark - it shows the health of the share market. If it goes down, it means that the market is going down (Bear market) and if it goes up, the market is going up (Bull market). Therefore going up is a good sign - it means that you'll get more price for the shares you have. It captures the movement of the share prices. Arising SENSEX means share prices are going up, as told earlier. Plus it also means that companies are doing well and shareholders will be earning more from their shares. In overall, it also reflects the condition on the Indian economy. Why? Because if companies do well, it augurs well for the Indian economy too. As the company's performance change the shares go up or down. If the company is doing welt or some news come that it will do well in future, SENSEX will go up. If there's a bad news, SENSEX will go down. Moreover, if there's some positive news about the country like India becoming a nuclear power, SENSEX will go up because India's economy is going up. So both companies and the country are responsible for the SENSEX movements.
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