A stock exchange helps companies raise capital or money by issuing equity shares to be sold to investors. The companies invest those funds back into their business, and investors, ideally, earn a profit from their investment in those companies.
What is Stock Exchange and its functions?
- Share,scripts,debentures,bonds,and other marketable securities
- Government securities
- Rights and interests vested in the traded securities.
What are the main objectives of Stock Exchange?
- Objectives of the stock exchange. Purchase and sale of securities. Transactions related to investment units, shares and bonds take place on the stock exchange. This is a specially organized and equipped platform for transactions in the stock market. In general, the processes on the site can be described as trading assets at the actual cost.
What is the role of the Stock Exchange?
- Facilitates evaluation of securities. ...
- Encourages capital formation. ...
- Regulates company management. ...
- Facilitates public borrowing. ...
- Provides clearing house facility. ...
- Facilitates healthy speculation. ...
- Serves as Economic Barometer. ...
- Facilitates Bank Lending. ...
- Raising capital for businesses. ...
- Mobilizing savings for investment. ...
What are the functions of the stock market?
- Fair Dealing in Securities Transactions. ...
- Efficient Price Discovery. ...
- Liquidity Maintenance. ...
- Security and Validity of Transactions. ...
- Support All Eligible Types of Market Participants. ...
- Investor Protection. ...
- Balanced Regulation. ...
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.