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Secretarial Practice · Class 12 Commerce

Ch 12Stock Exchange — Class 12 Secretarial Practice, concept-first.

A joint stock company raises long-term finance by issuing shares and debentures to the public (studied in the earlier chapters on Issue of Shares, Issue of Debentures and the Financial Market).

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Concepts

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Key concepts

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SEBI — Objectives and Functions

The Securities and Exchange Board of India was set up in 1988 and given statutory powers under the SEBI Act, 1992, to protect investors' interests and to regulate and promote the development of the securities market.

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

1

Meaning and Definition of a Stock Exchange

A joint stock company raises long-term finance by issuing shares and debentures to the public (studied in the earlier chapters on Issue of Shares, Issue of Debentures and the Financial Market).

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Features of a Stock Exchange

A stock exchange is not just any marketplace — it has a distinct set of characteristics that separate it from an ordinary market for goods.

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Functions of a Stock Exchange

A stock exchange performs several distinct functions in the economy, well beyond simply being a place where trades happen.

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Major Stock Exchanges in India and Market Indices

India today has two dominant, nationwide stock exchanges, both headquartered in Mumbai, along with a handful of smaller regional and specialised exchanges.

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Trading Mechanism — Screen-Based Trading and Settlement

Buying and selling on an Indian stock exchange today is entirely electronic, a system generally called screen-based (online) trading, which replaced the older 'open outcry' floor system where brokers…

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Listing of Securities

Meaning. Listing is the formal process by which a company's securities are admitted for trading on a recognised stock exchange, after the company enters into a Listing Agreement with that exchange and…

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SEBI — Establishment, Objectives and Functions

Establishment. The Securities and Exchange Board of India (SEBI) was first set up as a non-statutory body in 1988, in response to a series of stock-market irregularities and the rapid growth of the pr…

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Speculation and Investor Protection

Investment versus speculation. An investor buys securities mainly for steady income (dividend or interest) and reasonably safe, longer-term capital appreciation, after studying a company's fundamental…

Exercises

+Show 12 questions12 questions
  1. Q1The Securities and Exchange Board of India (SEBI) was given statutory status under the SEBI Act in the year: (a) 1988 (b) 1992 (c) 1996 (d)…Free
  2. Q2A stock exchange deals mainly in: (a) Securities issued for the first time (b) Already-issued (existing) securities (c) Real estate and immo…Free
  3. Q3State any four features of a stock exchange.Free
  4. Q4Distinguish between the primary market and the secondary market (the stock exchange).Preview
  5. Q5State any four functions of a stock exchange.Preview
  6. Q6Name the two major stock exchanges of India and state their respective benchmark indices.Preview
  7. Q7Explain the meaning of screen-based (online) trading on a stock exchange.Preview
  8. Q8What is 'rolling settlement'? Explain the T+1 settlement cycle followed by Indian stock exchanges.Preview
  9. Q9What is meant by 'listing of securities'? State any four benefits of listing to a company.Preview
  10. Q10Explain the objectives and functions of SEBI.Preview
  11. Q11What is speculation? Distinguish between a 'bull' and a 'bear' in a stock exchange.Preview
  12. Q12Briefly explain how a stock exchange, together with SEBI, protects the interests of investors.Preview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 13 questions13 questions
  1. Q1State whether the following statement is True or False: The securities market is an unorganized marketplace in India. (a) True (b) FalsePreview
  2. Q2Justify the following statement. The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India.Preview
  3. Q3Explain the following term/concept in detail: Stock ExchangePreview
  4. Q4State the functions of SEBI.Preview
  5. Q5Correct the underlined word and rewrite the following sentence. A stock market is an important constituents of **money** market.Preview
  6. Q6Explain the following term/concept in detail: Stock ExchangePreview
  7. Q7Justify the following statement. Stock exchanges work for the growth of the Indian economy.Preview
  8. Q8Explain the following term/concept. BearPreview
  9. Q9Correct the underlined word and rewrite the following sentence. A **Bear** expects the prices of shares to rise in the future.Preview
  10. Q10Explain the following term/concept in detail: Stock ExchangePreview
  11. Q11Distinguish between the following. Jobber and Broker.Preview
  12. Q12The oldest stock exchange in Asia is ______. (a) National Stock Exchange (NSE) (b) Bombay Stock Exchange (BSE) (c) Calcutta Stock Exchange (…Preview
  13. Q13Write a word / term / phrase which can substitute the following statement: An institution which controls and regulates activities of the sto…Preview