Which of the following is NOT an importance of stock exchanges?

Provides safety and security in dealings Intensifying capital formation Facilitates healthy speculation None of the above.

None of the above.

Stock exchange performs a number of functions in respect of marketability of different types of securities for investors and borrowing companies. It is important functions are: Provides safety and security in dealings: Activities of the stock exchange are controlled by the provisions of the Securities Control (Regulation) Act and all this creates confidence in the minds of investors. As transactions are conducted as per well-defined rules and regulations, fraudulent practices stand checked effectively ensuring safety, security and justice in dealings. Intensifying capital formation: Stock exchange accelerates the process of capital formation through creating the habit of saving, investing and risk taking among the investing class by converting their savings into profitable, safe investments. Facilitates healthy speculation: Healthy speculation, keeps the exchange active. Normal speculation is not dangerous but provides more business to the exchange. However, excessive speculation is undesirable as it is dangerous to investors & the growth of corporate sector.