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NSE nifty has

NSE nifty has

Looking for the answer to the question below related to Financial Management ?

NSE nifty has

 Options:

A. 20 stocks
B. 50stocks
C. 30 stocks
D. 25 stocks

The Correct Answer Is:

  • B. 50stocks

The correct answer is B. 50 stocks. The NSE Nifty, officially known as the Nifty 50 or simply the Nifty, is a stock market index in India that comprises 50 of the largest and most liquid stocks listed on the National Stock Exchange of India (NSE). Let’s explore in detail why this answer is correct and why the other options are not:

B. 50 stocks:

The Nifty 50 is a benchmark stock market index that tracks the performance of 50 of the largest and most actively traded companies listed on the NSE. These 50 companies are selected based on various criteria, including market capitalization, liquidity, and sector representation.

The Nifty is designed to provide a comprehensive view of the Indian equity market by including companies from various sectors of the economy. It is widely used by investors, traders, and financial professionals to gauge the overall health and direction of the Indian stock market.

The Nifty is a market capitalization-weighted index, which means that the larger the market capitalization of a constituent company, the greater its impact on the index’s movement.

The index is calculated using a free-float market capitalization methodology, which takes into account only the portion of a company’s shares that are available for public trading. This methodology ensures that the index accurately reflects the investable universe of stocks.

Now, let’s examine why the other options are not correct:

A. 20 stocks:

This option is not correct. The Nifty comprises 50 stocks, not 20. The Nifty 50 was introduced to provide a broader representation of the Indian stock market by including 50 significant companies. Reducing the number of constituent stocks to 20 would significantly narrow the index’s scope and make it less representative of the overall market.

C. 30 stocks:

This option is also not correct. The Nifty includes 50 stocks, not 30. While there are other indices in India, such as the Nifty Next 50 (which represents the next 50 companies by market capitalization after the Nifty 50), the Nifty itself is a 50-stock index designed to capture the performance of large-cap companies.

D. 25 stocks:

This option is not correct either. The Nifty 50 consists of 50 stocks, not 25. The inclusion of 25 stocks would not accurately represent the diversity and depth of the Indian equity market.

In summary, the NSE Nifty is a stock market index in India that comprises 50 of the largest and most liquid stocks listed on the National Stock Exchange of India (NSE).

It is widely used as a benchmark for the Indian stock market and provides investors and market participants with a comprehensive view of the country’s equity market. The number of constituent stocks in the Nifty 50 is indeed 50, making option B, “50 stocks,” the correct answer.

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