What are stock exchanges? What are their functions?
Ans. The stock exchanges are part of capital market. Securities (shares and debentures) are traded here. Their functions are as follows:
(a) They mobilize the savings of the small investors.
(b) They provide liquidity to the assets of investors.
(c) They provide funds to the companies to undertake productive activities.
(d) They increase inflow of foreign capital.
(e) They increase entrepreneurial ability in an economy by providing funds for investment.
(f) There are indirect benefits also in form of increased employment opportunities, share in GDP and increase in reputation of a country worldwide.
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