The following is not a function of stock exchange:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Restricting scope for speculation
Option (1) Pricing of securities — A function of a stock exchange (Incorrect). The demand for and supply of securities on the exchange fix their prices.
Option (2) Contributes to economic growth — A function of a stock exchange (Incorrect). As securities are bought and sold, savings move into their most productive uses, which builds capital and helps the economy grow.
Option (3) Restricting scope for speculation — Not a function of a stock exchange (Correct). The real function is providing scope for speculation. The exchange allows speculation within the law, in a restricted and controlled manner, because some healthy speculation keeps the market liquid and prices continuous. NTA changed the book’s ‘providing’ to ‘restricting’, and a function became a non-function. Check every word against the book before you tick.
Option (4) Spreading of equity cult — A function of a stock exchange (Incorrect). It spreads share ownership among the public by regulating new issues and educating people about investment.
Note 1: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below.
NCERT (Pre-rationalised Edition):
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Note 2: The same/similar question has been asked in different years by NTA as per the details given below:
| 2026 | 2025 | 2024 | 2023 | 2022 |
| 06-06 S1 24-05 S2 | – | – | – | – |