Question

Explain the functions of Stock Exchange. (any 5)

Hint:

Remember: Stock exchange → Liquidity + Investment + Price discovery.

Answer 1

Concept: A stock exchange is an organized market where securities are traded.
Step 1: Functions of Stock Exchange.

• Provides liquidity: Enables easy buying and selling of securities.
• Mobilisation of savings: Channels public savings into investments.
• Price determination: Determines prices through demand and supply.
• Safety of transactions: Ensures fair and transparent trading.
• Economic development: Promotes capital formation and growth.

Step 2: Conclusion.
Thus, stock exchanges play a vital role in financial and economic development.