Consider the following facts about stock exchange.

(A) Stock exchange provides scope for speculation

(B) Stock exchange regulates takeover bids by companies

(C) Stock exchange controls insider trading by imposing penalties

(D) Stock exchange ensures safety of transactions

(E) Stock exchange spreads equity cult

Choose the correct answer from the options given below :

(A), (D) and (E) only

The correct answer is option (1)- (A), (D) and (E) only

(A) Stock exchange provides scope for speculation- This is true about stock exchange. The stock exchange provides sufficient scope within the provisions of law for speculative activity in a restricted and controlled manner. It is generally accepted that a certain degree of healthy speculation is necessary to ensure liquidity and price continuity in the stock market.

(B) Stock exchange regulates takeover bids by companies- This is the regulatory function of SEBI. The companies make public offers, disclose all relevant information to shareholders, and follow a prescribed process in the event of a takeover bid, ensuring that the shareholders' rights are protected and that the market remains transparent. Stock exchange regulates these bids.

(C) Stock exchange controls insider trading by imposing penalties- This is the protective function of SEBI. Insider trading involves trading in a company's securities by individuals who have access to non-public, price-sensitive information about the company. SEBI has put in place strict regulations to prevent insider trading to protect the integrity of the securities markets.

(D) Stock exchange ensures safety of transactions- This is true about stock exchange. The membership of a stock exchange is well regulated and its dealings are well defined according to the existing legal framework. This ensures that the investing public gets a safe and fair deal on the market.

(E) Stock exchange spreads equity cult- This is true about stock exchange. The stock exchange can play a vital role in ensuring wider share ownership by regulating new issues, better trading practices and taking effective steps in educating the public about investments.