State any three functions of a stock exchange.

Question

Accepted Answer

Three important functions of a stock exchange are:

1. **Continuous and Ready Market for Securities:** A stock exchange provides a central market for the purchase and sale of securities. It provides a ready and continuous outlet for buying and selling securities, ensuring buyers and sellers can trade as and when they want.

2. **Facilitates Evaluation of Securities:** A stock exchange publishes price quotations of the shares of listed companies after thorough analysis of the demand and supply position. This enables investors to know the true worth of their holdings at any time.

3. **Provides Safety and Security in Dealings:** Activities of the stock exchange are controlled by the provisions of the Securities Control (Regulation) Act. Transactions are conducted as per well-defined rules and regulations, ensuring fraudulent practices are checked effectively, thus providing safety and justice in dealings.