Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the marketandrsquo;s perception of a companyandrsquo;s worth and helps investors predict the future performance of the companyandrsquo;s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?

EduRev

All Courses

Explore Courses UPSC Exam UPSC Test Series Free Notes EduRev Infinity

Open App

UPSC Exam > UPSC Questions > Consider the following statements regarding t...

Join the Discussion on the App

Consider the following statements regarding the total market capitalisation of a company:

1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.

2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.

Which of the statements given above is/are correct?

a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 nor 2

Correct answer is option 'C'. Can you explain this answer?

FREE This question is part of

Daily Current Affairs MCQ- February 14, 2024

Attempt Test

Attempt this Test

Most Upvoted Answer

Consider the following statements regarding the total market capitalis...

Reliance Industries Limited (RIL) recently became the first Indian company to surpass Rs 20 lakh crore in market capitalisation.

About Market Capitalisation:

Market Capitalization, or Market Cap, is a term used to represent the market value of a company based on its current share price and the total number of its outstanding shares.
It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.
It represents the market’s perception of a company’s worth and indicates its size and significance in the financial markets.
On the basis of market cap, companies may be classified as large-cap, mid-cap, or small-cap companies.
Large-cap companies are usually stable, reputable, and well-established businesses that have a significant market share. They have market caps of INR 20,000 crore or more.
Mid-cap companies have a market cap ranging from INR 5,000 crore to INR 20,000 crore.
Small-cap companies operate at a smaller scale than large-cap and mid-cap companies. Consequently, their market cap is also lower (less than INR 5,000 crore).
Why is market capitalization important?
It allows potential investors to understand the true value of companies and the size of one company in relation to another.
It helps investors predict the future performance of the stock of a company because it reflects what the market is willing to pay for the stock.

What is Free float market capitalisation?

While calculating the total market capitalization of a company, all the shares, including the ones publicly traded as well as those held by promoters, government, or other private parties, are multiplied with the stock price.
But in the free-float market capitalization, we exclude shares held by private parties like promoters, trusts, or the government.
We only consider shares held and traded by the public and multiply them with share price to arrive at the free-float market capitalization of a company.

Hence both statements are correct.

Answered by Notes Wala · View profile

Attention UPSC Students!

To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.

Current Affairs & Hindu Analysis: Daily, Weekly & Monthly

History for UPSC CSE

Lucent for GK

Indian Polity for UPSC CSE

View all answers Start learning for free

< Previous Question Next Question >

Explore Courses for UPSC exam

Similar UPSC Doubts

Consider the following statements regarding National Sports Awards:1. Major Dhyan Chand Khel Ratna Award is given for outstanding performances in sports spanning over a period of four years.2. Maulana Abul Kalam Azad Trophy is given to an individualfor top performance in inter-university tournaments.Which of the statements given above is/are correct?

View answer

Consider the following statements regarding National Sports Awards: Major Dhyan Chand Khel Ratna Award is given for outstanding performances in sports spanning over a period of four years. Maulana Abul Kalam Azad Trophy is given to an individualfor top performance in inter-university tournaments.Which of the statements given above is/are correct?

View answer

Which of the following best defines market capitalisation ?

View answer

Consider the following statements. The Constitution of India stipulates that a state cannot raise a loan without the consent of the Government of Indiaif any part of a previous loan from the central government remains outstanding. States in India have a normal net borrowing ceiling set at 5% of Gross State Domestic Product (GSDP)for the fiscal year 2024, as per the Fifteenth Finance Commission’s recommendation. States in India receive an extra 0.5% of GSDPin borrowing capacity as a performance-based incentive for power sector reforms.How many of the above statements is/are correct?

View answer

The government plans to come out with Indradhanush 2.0, a comprehensive plan for the recapitalisation of public sector lenders. Consider the following statements regarding the Indradhanush Programme:1) Under Indradhanush roadmap the government had aimed to meet their capital requirement in line with global risk norms, known as Basel-III.2) The mission includes the seven key reforms of appointments, the board of bureau, capitalisation, de-stressing, and empowerment, the framework of accountability and governance reforms.Q. Which of the above statements is correct?

View answer

Top Courses for UPSCView all

Current Affairs & Hindu Analysis: Daily, Weekly & Monthly

History for UPSC CSE

Lucent for GK

Indian Polity for UPSC CSE

CSAT Preparation

Top Courses for UPSC

View all

Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?

Share with a Friend

Answer this doubt

Question Description
Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.

Solutions for Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.

Here you can find the meaning of Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Consider the following statements regarding the total market capitalisation of a company:1. It can be calculated by multiplying the number of outstanding shares of a company by the current price of its shares.2. It represents the market’s perception of a company’s worth and helps investors predict the future performance of the company’s stock.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice UPSC tests.

Explore Courses for UPSC exam