Stock exchanges help companies raise finance, provide liquidity and safety of investment to the investors and enhance the ________ of individual companies.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → credit worthiness
Option (1) credit worthiness — Correct. Stock exchanges help companies raise finance and give investors liquidity and safety. They also enhance the credit worthiness of individual companies.
Option (2) capital formation — Incorrect. Capital formation comes when savings are channelised into productive investments. It is how a stock exchange contributes to economic growth. It is a gain for the whole economy.
Option (3) marketability — Incorrect. A stock exchange gives marketability to existing securities, by creating a continuous market for them. Marketability belongs to securities.
Option (4) price continuity — Incorrect. Price continuity in the market comes from a certain degree of healthy speculation. It describes the market as a whole.
NCERT (Pre-rationalised Edition):
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