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    Chapter 14 Stock Exchange

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    Chapter 14 Stock Exchange

    Uploaded by

    pynchluvr2108
    3 views11 pages

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    © © All Rights Reserved

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    3 views11 pages

    Chapter 14 Stock Exchange

    Uploaded by

    pynchluvr2108

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    It is a place where shares of pubic listed

    companies are traded.

    A stock exchange facilitates stock brokers to


    trade company stocks and other securities.
    Stock
    Exchange A stock may be bought or sold only if it is
    listed on an exchange.

    Thus, it is the meeting place of the stock


    buyers and sellers.
    Functions of Stock Exchange

    1.Role of an Economic Barometer: Stock exchange serves as an economic


    barometer that is indicative of the state of the economy. It records all the major and
    minor changes in the share prices. It is rightly said to be the pulse of the economy,
    which reflects the state of the economy.
    2.Valuation of Securities: Stock market helps in the valuation of securities based on
    the factors of supply and demand. The securities offered by companies that are
    profitable and growth-oriented tend to be valued higher. Valuation of securities
    helps creditors, investors and government in performing their respective functions.
    1. Transactional Safety: Transactional safety is ensured
    as the securities that are traded in the stock exchange
    are listed, and the listing of securities is done after
    verifying the company’s position. All companies
    listed have to adhere to the rules and regulations as
    laid out by the governing body.
    2. Contributor to Economic Growth: Stock exchange
    offers a platform for trading of securities of the
    various companies. This process of trading involves
    continuous disinvestment and reinvestment, which
    offers opportunities for capital formation and
    subsequently, growth of the economy.
    Making the public aware of equity investment: Stock
    exchange helps in providing information about
    investing in equity markets and by rolling out new
    issues to encourage people to invest in securities.

    Offers scope for speculation: By permitting


    healthy speculation of the traded securities,
    the stock exchange ensures demand and supply
    of securities and liquidity.
    Services of Stock Exchange

    To Corporate To Investors To Community


    • Wider Market • Liquidity of • Financing
    • investment • Channel for
    Prestige
    • Safety
    • High share price • Loan facility
    profitable
    • Price stability • Publicity
    Investment
    • Investment guide
    • Public finance
    • Better bargain • Economic mirror
    • Less risk
    Types of
    Operators
    • Brokers
    • Jobbers
    • Bull
    • Bear
    Terms used in
    Stock Exchange
    • Ex- Dividend
    • Cum- Dividend
    • Spot Delivery
    • Forward Delivery
    SEBI
    • The Securities and
    Exchange Board of India is
    the regulatory body for
    securities and commodity
    market in India under the
    jurisdiction of Ministry of
    Finance, Government of
    India.
    • It was established on 12
    April 1988 and given
    Statutory Powers on 30
    January 1992 through the
    SEBI Act, 1992.

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