Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Markets

Question:
Stock exchanges provide an opportunity for investors to disinvest and invest. Identify the related function of the stock exchange.
Options:
Providing scope for speculation
Providing liquidity and marketability to existing securities
Pricing of security
Spreading of the equity cult
Correct Answer:
Providing liquidity and marketability to existing securities
Explanation:
Providing Liquidity and Market ability to Existing Securities: The basic function of a stock exchange is the creation of a continuous market where securities are bought and sold. It gives investors the chance to disinvest and reinvest. This provides both liquidity and easy marketability to already existing securities in the market.