Question

Choose the incorrect statement from the following about functions of a Stock Exchange:

• A. Provides liquidity and marketability to new securities
• B. Ensures safety of transactions
• C. Contributes to economic growth
• D. Provides scope for speculation

Answer 1

The Correct Option is A

Step 1: Stock exchanges provide liquidity and marketability to existing securities, not new securities. New securities are introduced in the primary market. Step 2: Thus, the statement that stock exchanges provide liquidity to new securities is incorrect. Thus, the correct answer is option A.