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प्रश्न
Write notes on.Functions of stock exchange.
उत्तर
Meaning: - Stock exchange is a specific place where trading of the securities is arranged in an organised method. In simple words it is a place where shares, debentures and bonds (securities) are purchased and sold. The term securities include equity shares, preference shares, debentures, government bonds, etc. including mutual funds.
Presence and vibrant functioning of a stock exchange is necessary for developing economy. It reflects a healthy financial and investment conducive atmosphere in the economy.
The Indian securities market is considered as one of the most promising emerging markets. It is one of the top eight markets of the world.
- Liquidity: -It is the Stock Exchange that provides liquidity to private investment in corporate enterprises. The stock exchange provides marketability along with liquidity to the product called securities.
- Fair Evaluation of Securities: -Stock exchanges like any other market provide amechanism (instrument) for evaluating the prices of securities through the basic law of demand and supply. Stock exchange prices help to check the real worth of the securities in the market.
- Promotes capital Formation: -Stock exchange motivates the investors to invest their savings in the securities of the reputed companies. As stock exchange is the creation of continuous market where buying and selling of securities continuously goes on. As a result, capital flows continuously into business field. Thus formation of capital goes on.
- Protects investors’ interest: -All the transactions in the stock exchanges are effected and controlled by the securities control (regulation) Act 1956. The stock exchanges protect the interest through the strict enforcement of their rules and regulations.
- Economic Barometer: -A stock exchange serves as a reliable barometer of a country’s economic status. ‘Stock exchanges support and promote industrial development. It stimulates investment in productive sector which accelerates the process of economic development of the nation.
- Motivation to the management to improve its performance: -An exchange allows the trading of listed securities only. While getting the shares listed on exchange, a company is required to follow certain guidelines for protecting the interest of shareholders.
- Regulation of speculative transaction: - Speculation is an important part of stock exchange operations. The stock exchange enables speculators to speculate and secure adequate profits through fluctuation in security prices.
Best utilisation of capital: -The Stock exchange regulates and controls the flow of investment from unproductive to productive, uneconomic to economic, unprofitable to profitable enterprises. Thus, savings of the people are channelized into industry yielding good return and underutilisation of capital is avoided
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संबंधित प्रश्न
Explain any three functions of stock exchange.
An institution which regulates and controls the activities of the Stock Exchange is called _______.
Write notes on Functions of S.E.B.I.
State, with reason, whether the following statement is True or False.
Stock exchanges reflect financial progress of the company.
Name the document prepared in the process of online trading of securities that is legally enforceable and helps to settle disputes/claims between the investor and the broker.
Jobber and stockbroker
Write a word or a term or a phrase which can substitute the following statement :
The place where buying and selling of securities takes place.
Write Short Notes on Role of Stock Exchange (March 2009)
Answer the following question.
Stock exchange acts as a regulator of the securities market. It creates a continuous market where the securities are bought and sold. It gives investors the chance to disinvest and reinvest. Through this process of disinvestment and reinvestment, savings get channelized into their most productive investment avenues. To ensure that the investing public gets a safe and fair deal in the market, the membership of the stock exchange is well regulated and its dealings are well defined according to the existing legal framework. It also ensures a wider share of ownership by regulating new issues, better trading practices, and taking effective steps in educating the public about investments.
Various functions performed by the Stock Exchange are discussed in the above para. By quoting lines from above para, state any four functions of the stock exchange.
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.
Which of the following is a function of the stock exchange?
The organisation/institution which provides scope for speculation is :
When the stock market is bearish, a company must go for which of the following?
When the stock market is bullish, a company must go for which of the following?
The organisation/institution which provides scope for speculation is:
______ refers to the time period between placing an order its receipts in stock.
