Short Answer Questions · Q4
Q.What are the functions of the Stock Exchange?
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Start your 14-day free trial to unlock the full solution →A stock exchange provides liquidity/marketability, prices securities, ensures safety, aids economic growth, spreads the equity cult, and provides scope for speculation.
The important functions of a stock exchange are:
- Providing liquidity and marketability to existing securities. It creates a continuous market where securities are bought and sold, giving investors the chance to disinvest and reinvest.
- Pricing of securities. Share prices are set by demand and supply; the exchange is a mechanism of constant valuation that provides instant price information.
- Safety of transaction. Its regulated membership and well-defined dealings ensure a safe and fair deal for investors. …
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