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Ch 7Stock Exchange — Class 12 Commerce, concept-first.

A stock exchange is often the most visible face of a country's capital market — it is the place where the general public most directly encounters "the market", through daily news of index levels rising or falling.

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Key concepts

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Meaning and Definition of a Stock Exchange

A stock exchange is an organised secondary market, defined under Section 2(j) of the Securities Contracts (Regulation) Act, 1956 as a body of individuals constituted to assist, regulate or control the buying, selling and…

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Chapter contents

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Meaning and Definition of a Stock Exchange

A stock exchange is often the most visible face of a country's capital market — it is the place where the general public most directly encounters "the market", through daily news of index levels risin…

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Functions of a Stock Exchange

A stock exchange performs several functions that go well beyond simply hosting buy-and-sell transactions — together, they make it one of the pillars of a modern economy's financial system.

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Features of a Stock Exchange

A stock exchange can be recognised by a set of features that together distinguish it from an ordinary marketplace or an informal trading arrangement:

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Listing of Securities

Listing refers to the formal admission of a company's securities to trading on a recognised stock exchange, after the company satisfies that exchange's prescribed eligibility criteria and enters into…

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Trading Procedure and Dematerialisation

Trading in securities today looks very different from the paper-share, open-outcry trading floor of even a few decades ago.

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Major Indian Stock Exchanges and Indices

India's securities market is dominated by two major national stock exchanges, each with its own benchmark index that is widely tracked as an indicator of the health of the Indian economy.

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Speculation on a Stock Exchange

Not everyone who trades on a stock exchange does so as a long-term investor seeking dividend income and steady capital appreciation.

Exercises

+Show 10 questions10 questions
  1. Q1What is a stock exchange? Define it as per the Securities Contracts (Regulation) Act, 1956.Free
  2. Q2Explain the features (characteristics) of a stock exchange.Free
  3. Q3Explain the functions of a stock exchange.Free
  4. Q4How does a stock exchange act as a 'barometer of the economy'?Preview
  5. Q5What is meant by listing of securities? Why do companies get their securities listed on a stock exchange?Preview
  6. Q6Explain the role of dematerialisation and the depository system in the trading of securities.Preview
  7. Q7Describe the trading and settlement procedure on a stock exchange.Preview
  8. Q8Write a note on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).Preview
  9. Q9Distinguish between the BSE Sensex and the NSE Nifty 50.Preview
  10. Q10Who is a speculator on a stock exchange? Distinguish between a Bull, a Bear and a Stag.Preview

Sample & Board Papers

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

+Show 28 questions28 questions
  1. Q1NSEI was established in: (a) 1997 (b) 1990 (c) 1992 (d) 1998Preview
  2. Q2Match the following : | # | Column I | | Column II | | --- | --- | --- | --- | | (1) | Dalal Street | (i) | New York Stock Exchange | | (2)…Preview
  3. Q3Stock Exchange Market is also called ________. (a) National Market (b) Spot Market (c) Local Market (d) Security MarketPreview
  4. Q4Define Stock Exchange according to Hastings.Preview
  5. Q5Explain 'Bear'.Preview
  6. Q6(a) Explain any five differences between Stock Exchange and Commodity Exchange. OR (b) Explain the benefits of training to the Employees.Preview
  7. Q7Stock Exchanges are ______. (a) Protection to Investors (b) Facilities for speculation (c) Ready Market (d) All of the abovePreview
  8. Q8There are ______ stock exchanges in the country. (a) 20 (b) 21 (c) 25 (d) 24Preview
  9. Q9Which one of the market deals in the purchase and sale of shares and debentures ? (a) Local market (b) Stock exchange market (c) Family mark…Preview
  10. Q10What is stock exchange ?Preview
  11. Q11Explain stag type of speculator.Preview
  12. Q12(a) Explain any five functions of Stock Exchange. OR (b) Explain any five kinds of Debentures.Preview
  13. Q13There are ______ Stock Exchanges in the Country. (a) 20 (b) 21 (c) 25 (d) 24Preview
  14. Q14Trading in dematerialized shares commenced on the NSE in the year ______. (a) 1997 (b) 1995 (c) 1998 (d) 1996Preview
  15. Q15What are the types of Speculators?Preview
  16. Q16Explain Bear Speculator.Preview
  17. Q17What is meant by Stock Exchange ?Preview
  18. Q18When the NSEI was established ? (a) 1998 (b) 1990 (c) 1997 (d) 1992Preview
  19. Q19A Pessimistic speculator is ______. (a) Bull (b) Stag (c) Lame Duck (d) BearPreview
  20. Q20Write a short note on OTCEI.Preview
  21. Q21What is meant by Remisers ?Preview
  22. Q22Write any three limitations of Stock Exchange.Preview
  23. Q23(a) Write notes on : (i) National Stock Exchange (NSE) (ii) National Securities Depository Limited (NSDL) OR (b) Explain the importance of E…Preview
  24. Q24________ is the oldest Stock Exchange in the world. (a) National Stock Exchange (b) London Stock Exchange (c) Amsterdam Stock Exchange (d) B…Preview
  25. Q25There are ________ Stock Exchanges in the country. (a) 20 (b) 21 (c) 25 (d) 24Preview
  26. Q26What is Speculation?Preview
  27. Q27What is meant by Dematerialization?Preview
  28. Q28(a) Write notes on : (i) Soft Commodities market. (ii) National Clearance and Depository System (NCDS). OR (b) Enumerate the functions of Ma…Preview