This impact cost refers to the trading price of single security in relation to the index’s weight to the company’s market capitalization.
To measure the liquidity of the stock of any company, the average impact cost is considered.
The stock of such a company should be highly liquid.The first and foremost condition is that the company has to be an Indian Company and registered on the National Stock exchange.The specific eligibility criteria required by the companies to be listed on Nifty are discussed below. The latest performance of these companies is reviewed for the period of the last 6 months to be eliminated or added to the list of companies traded on Nifty. Securities listed on Nifty are among the top-rated companies hence, there are strict eligibility criteria for the companies to be listed on Nifty. Investors have the benefit of choosing top stocks for investment and trading to maximize their returns. Nifty 50 is used for various purposes like benchmarking fund portfolios, index-based derivatives, and index funds. These companies are from various sectors in India like pharmaceuticals, consumer goods, financial services, energy, telecommunications, cement, information technology, automobiles, and more. This index is formed of the top 50 equity stocks of those companies that are listed in the country in terms of liquidity and market capitalization. Nifty 50 is the market index of the National Stock Exchange and is owned by India Index Services and Products (IISL). Informed investors and traders, however, can gain huge returns by careful research and analysis of the two national indices in India namely, Nifty and Sensex. This is mainly due to a lack of investor awareness and also lack of knowledge of the investment products that offer good returns at a relatively lower risk. Investment in the stock market is viewed as a gamble by the majority of people.
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