Question

Study the following case/situation and express your opinion.

Mr. P has a recently got his B.Sc. degree. He has enrolled for a course in securities market. As a new student of this subject, he has few queries as follows :

1. Does a Company need to be listed on a stock exchange to sell its securities through the stock exchange.
2. What is the term used for referring to a stock exchange’s ability to reflect the economic conditions of a country?
3. What is the term which refers to the functions of the stock exchange as a provider of a ready market for sale and purchase of security?

Answer 1

1. Yes, a company needs to be listed on a stock exchange to sell its securities through the stock exchange.
2. ‘Economic mirror’ is the term used for referring to a stock exchange’s ability to reflect the economic conditions of a country
3. ‘Liquidity’ is the term which refers to the functions of the stock exchange as a provider of a ready market for sale and purchase of the security.