"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."

Identify the function of stock exchange pointed out in the above paragraph.

Spreading of equity cult

The correct answer is option (4)- Spreading of equity cult.

The function of stock exchange pointed out in the above paragraph is Spreading of equity cult.

The paragraph discusses how the stock exchange helps in ensuring wider share ownership by regulating new issues, improving trading practices, and educating the public about investments. This is aimed at promoting investment in equities (stocks) and encouraging more people to participate in the stock market, thus spreading the "equity cult."

Spreading of Equity Cult: 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.

OTHER OPTIONS

• Safety of Transaction: 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.

• Contributes to Economic Growth: A stock exchange is a market in which existing securities are resold or traded. Through this process of disinvestment and reinvestment savings get channelised into their most productive investment avenues. This leads to capital formation and economic growth.

• Providing Scope for Speculation: 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.