22.6       ndian     onom
                                                           usually to neutralise the transportation cost of the
        bAD Debt                                           bulky products such as cement, iron and steel,
     An accounting term to show the loans which are        petroleum, etc.
     unlikely to be paid back by the borrower as the
     borrower has become insolvent/bankrupt. Banks            bellwether stock
     might write off such bad debts against the profits
                                                           A share which often reflects the state of the whole
     of the trading as a business cost.
                                                           stock market. The technical analysts, associated
                                                           with the stock market, usually keep a track-record
        bADlA                                              of such shares and go on to forecast the future
     An Indian term for ‘contango’ associated with         stock movements.
     the trading system in the stock market which is
     a postponement of either payments by the share           bfs
     buyer, or the person who needs to deliver the
                                                           For the purpose of supervision and surveillance of
     shares against the payment.
                                                           the Indian financial system, a Board for Financial
                                                           Supervision (BFS) was set up by the RBI in
        bAlAnceD buDget                                    November 1994. The board supervises commercial
     The annual financial statement (i.e., the budget)     banks, non-banking financial companies
     of a government which has the total expenditures      (NBFCs), financial institutions, primary dealers,
     equal to the taxes and other receipts.                and the clearing corporation of India (CCI).
          Most governments, in practice run unbalanced
     budgets, i.e., deficit budgets or surplus budgets–       blAck-scholes
     either the expenditures being higher or lower than    A formula devised for the pricing of financial
     the taxes and the other receipts, respectively. It is derivatives or options—made explosive growth
     done to regulate the economic activities.             possible in them by the early 1970s in the US.
                                                                Myron Scholes and Robert Merton were
        bAlAnce of pAyments                                awarded Nobel Prize for Economics for their part
     A balance sheet of an economy showing its             in devising this formula—the co-inventor Fischer
     total external transactions with the world–           Black had died (1995) by then.
     calculated on the principles of accounting–is an
     annual concept.                                          bonD
                                                           An instrument of raising long-term debt on which
        bAlloon pAyment                                    the bond-issuer pays a periodic interest (known
     When the final payment of a debt is more than the     as ‘coupon’ ). In theory, bonds could be issued by
     previous payments, it is balloon payment.             governments as well as private companies.
                                                                Bonds generally have a maturity period,
        bAsing point price system                          however, some bonds might not have any definite
                                                           maturity period (which are known as ‘Perpetual
     A method of pricing in which a differential (i.e.,    Bonds’ ).
     varying) price is fixed for the same product for
                                                                Bonds are supported/secured by collateral in
     the customers of the different locations—nearer
                                                           the form of immovable property (i.e., fixed assets)
     the customer, cheaper the product. This is done