Glossary

I

• Interest Rate Risk The prices of a debt security are subject to the interest rate fluctuations in the market. An increase in the interest rates results in decrease in value of the bond. Therefore debt oriented mutual fund schemes; this interest rate risk affects the NAV of the fund.
• Interest   Money paid or earned for the use of money.  
• In-the-money option An option that has intrinsic value. In the case of a call, an option whose exercise price is below the current underlying share price, or in the case of a put, an option whose exercise price is above the current underlying price.
• Intraday Turnover Total value of buy & Sell trades executed on an exchange in a single session is called as Intraday Turnover.
• Intrinsic value The amount, if any, by which an option is currently in the money. An option that is not in-the-money has no intrinsic value.
• Intrinsic value The price a security ought to have based on all factors bearing on valuation.  
• IPO Also called initial public offer. A company's first offering of equity stock to the general public.  
• ISIN ISIN is the Commodity Identification Number by which each commodity along with its specific details is uniquely represented.  
• Issue Price Indian primary market ushered in an era of free pricing in 1992. Following this, the guidelines have provided that the issuer in consultation with Merchant Bankers shall decide the price. There is no price formula stipulated by SEBI. SEBI does not play any role in price fixation. The company and merchant banker are however required to give full disclosures of the parameters, which they had considered while deciding the issue price. There are two types of issues one where company and LM fix a price (called fixed price) and other, where the company and LM stipulate a floor price or a price band and leave it to market forces to determine the final price (price discovery through book building process).