Q.Write any three limitations of Stock Exchange.

The stock exchange has drawbacks such as excessive speculation, price manipulation by large operators, and violent price fluctuations that harm small investors; any three of these are the answer. While the stock exchange provides liquidity and a market for securities, its working has several limitations: 1. Encourages excessive speculation: the exchange becomes a place for gambling in shares, where people trade for quick gains rather than genuine investment, making the market unstable. 2. Price manipulation: powerful operators and groups can artificially rig prices up or down (rigging, cornering), misleading and cheating small, uninformed investors. 3. Wide price fluctuations: share prices swing sharply on the basis of rumours, sentiment and news rather than real value, causing uncertainty and sometimes heavy losses to ordinary investors. (Other limitations include the danger of panic selling that can spread to …