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Question
Define Stock Exchange.
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Solution
A Stock Exchange is an institution which provides a platform for buying and selling of existing securities. According to the Securities Contracts (Regulation) Act, 1956, “Stock Exchange means any body of individuals whether incorporated or not constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities.”
RELATED QUESTIONS
The place where buying and selling of securities takes place
Explain any three functions of stock exchange.
An institution which regulates and controls the activities of the Stock Exchange is called _______.
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.
_____ is the oldest stock exchange in the world.
Stock exchange allow trading in _______.
What is meant by Stock Exchange?
______ was developed in Ahemdabad as Ahmedabad Stock Exchange (ASE) in 1894.
The organisation/institution which provides scope for speculation is :
Read the following text and answer the following questions on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of Rs. 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
Employ more of cheaper debt may enhance the EPS. Such practice is called :
