Question

Explain the features of Stock Exchange.

Answer 1

There are various features of a stock exchange. They are given below:

1. Market for Securities: Stock exchange is a market, where securities of corporate bodies, government companies are bought and sold.
2. Deals in Second Hand Securities: It deals with shares, debentures bonds and securities already issued by the companies.
3. Regulates Trade in Securities: Stock exchange does not buy or sell any securities on its own account. It regulates the trade activities so as to ensure free and fair trade.
4. Allows Dealings only in Listed Securities: In the stock exchange only listed securities are purchased and sold. Unlisted securities cannot be traded in the stock exchange.
5. Association of Persons: A stock exchange is an association of persons or body of individuals which may be registered or unregistered.