What is the role of an exchange in the financial markets?
An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange.
What is stock exchange and its role?
The stock exchange is a virtual market where buyers and sellers trade in existing securities. It is a market hosted by an institute or any such government body where shares, stocks, debentures, bonds, futures, options, etc are traded. A stock exchange is a meeting place for buyers and sellers.
What is the most important role in the stock exchange market?
Facilitates liquidity: The most important role of the stock exchange is in ensuring a ready platform for the sale and purchase of securities. This gives investors the confidence that the existing investments can be converted into cash, or in other words, stock exchange offers liquidity in terms of investment.
What role does the stock market play in the financial stability of the economy?
Stock markets affect the economy in three critical ways: They allow small investors to invest in the economy. They help savers beat inflation. They help businesses fund growth.