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प्रश्न
Explain any three functions of stock exchange.
'The Stock Exchange performs many vital functions in today's commercial world.' Explain any three such functions.
'Stock Exchange not only contributes to the economic growth but performs many other functions'. Explain any three such functions.
State any four functions of 'Stock Exchange.'
State any three functions of Stock Exchange.
उत्तर
The Stock Exchange serves the sole purpose of providing a market space for purchase and sale of securities in a transparent manner. Its functions can be explained using the following points:
- Provides Liquidity and Marketability: The stock exchange provides a platform where sale and purchase of existing securities can take place. In this way, the stock exchange facilitates the conversion of securities to cash as and when required. In addition, it renders liquidity to long-term securities and can be converted to medium-term and short-term securities
- To provide fair deals through market price determination: The market demand and market supply are forces which determine the price of a security. The Stock Exchange makes sure that all buyers deal in that price only and not higher.
- Safety of Transaction: A stock exchange's membership is carefully controlled, and its transactions are well defined under the existing legal framework.
- Spreading of Equity Cult: By regulating new issues, improving trading procedures, and taking effective steps to educate the public about investments, the stock market plays a critical role in insuring greater share ownership.
- Providing Scope for Speculation: Speculative operations are carried out within the confines of the law, in a restricted and controlled manner.
- Contributes to Economic Growth: : A stock exchange is a market for existing securities which leads to in capital generation and economic progress.
Notes
Students should refer to the answer according to their questions.
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संबंधित प्रश्न
The floor of the stock exchange premises where the trading or auction of shares takes place.
An institution which regulates and controls the activities of the Stock Exchange is called _______.
Write a word or a term or a phrase which can substitute each of the following statements:
The highest price quoted by a buyer to buy a specified number of shares or stock at any given time.
Write notes on Functions of S.E.B.I.
A market place where existing securities are bought and sold.
The institution which regulates business in stock exchange.
Name any two details that need to be provided by the investor to the broker while filling a client registration form.
Jobber and stockbroker
Write Short Notes on Role of Stock Exchange (March 2009)
_____ is the oldest stock exchange in the world.
Stock exchanges deal in _________.
Stock exchange allow trading in _______.
The total number of Stock Exchange in India is
______ was developed in Ahemdabad as Ahmedabad Stock Exchange (ASE) in 1894.
When the stock market is bullish, a company must go for which of the following?
The organisation/institution which provides scope for speculation is:
Read the following text and answer the following questions on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of Rs. 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
Employ more of cheaper debt may enhance the EPS. Such practice is called :
______ is a number assigned to each transaction by the stock exchange and is printed on the contract note.
Arrange the steps involved in trading procedure at the stock exchange in correct sequence:
- Settlement of order
- Opening of Demat Account
- Placing of order
- Execution of order
