Question

Study the following case/situation and express your opinion.

Mr. Pankaj has recently got his B.Sc. degree. He has enrolled in a course in the securities market. As a new student of this subject, he has a 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 the sale and purchase of security?

Answer 1

1. Yes, a company must be listed on a stock exchange in order to sell its securities on the stock exchange.
2. The term 'economic mirror' refers to a stock exchange's ability to reflect a country's economic conditions.
3. The term 'liquidity' refers to the stock exchange's functions as a provider of a ready market for the sale and purchase of securities.