Articles
What role does a stock exchange play in an economy?
by Amar Chauhan StudentThe basic
function that a stock exchange plays in an economy is that of providing a
persistent and quick demand for selling and buying securities. It makes sure
that there is a constant demand for the same. It also provides a ready outlet
for such transactions to go through. A stock exchange also works as an outlet
for the sale of the securities that have been listed on the same.
It speeds
up the process of capital formation and accumulation
This is one
of the different functions that a stock exchange plays. However, please
remember that there is a limit to how much it is capable of doing so. This
particular function of
stock exchange brings about a habit of saving and
investment among the people who take part in the same. It encourages them to
take risks so that they can grow their wealth. The main aim of a stock exchange
is to change the money that an investor has saved to profits. It works as a
tool for forming capital as well. It is a medium that is as secure as possible
and can help you earn profits too.
It provides
all investors essential information
This is one
of the basic functions that a stock exchange plays. The information that
it imparts is necessary for all investors – current and prospective ones. You
can easily find such information on the websites of these stock exchanges. They
also offer ads regularly on media such as newspapers, television channels, and
business magazines, to name a few. It is from these ads that the investors come
to know of the various opportunities they have for investing in the same. This
way, they have more knowledge of how to invest in the stock market.
A stock
exchange is supposed to provide you with a secure and safe way of investing
money and conducting business. This is one of the topmost priorities of a stock
exchange. You too can play your part in this by investing through a service
provider such as 5paisa. All the
transactions that take place in the stock exchange are done as per rules and
regulations that are clearly defined. You also have an authority body over here
– SEBI (Securities and Exchange Board of India) – that presides over the stock
exchanges in India and keeps everybody in check including the employees of the
same. It discourages forgery and deals swiftly with all such cases.
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About Amar Chauhan 
Student
0 connections, 0 recommendations, 12 honor points.Joined APSense since, November 7th, 2021, From Mumbai, India.
Created on Dec 12th 2021 12:06. Viewed 398 times.
