Question:
From the following, identify the one which is not a function of the stock exchange:
From the following, identify the one which is not a function of the stock exchange:
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Stock exchanges enhance liquidity and investor confidence but cannot fully eliminate speculation.
Updated On: Feb 20, 2025
- Providing liquidity and marketability to existing securities.
- Spreading of equity cult.
- Ensuring the safety of transactions.
- Ensuring that there is no scope for speculation.
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The Correct Option is D
Solution and Explanation
Step 1: Understanding Functions of a Stock Exchange
A stock exchange facilitates trading by providing liquidity, ensuring safety, and promoting investments.
Step 2: Evaluating the Given Statements
- (A) Liquidity and marketability of securities are key functions of stock exchanges.
- (B) Stock exchanges encourage public participation in equity investment.
- (C) Transactions are regulated for safety.
- (D) Stock exchanges cannot entirely eliminate speculation, as it is a part of market operations.
Conclusion: The correct answer is (mathbf{(D)}), as speculation exists in every financial market.
A stock exchange facilitates trading by providing liquidity, ensuring safety, and promoting investments.
Step 2: Evaluating the Given Statements
- (A) Liquidity and marketability of securities are key functions of stock exchanges.
- (B) Stock exchanges encourage public participation in equity investment.
- (C) Transactions are regulated for safety.
- (D) Stock exchanges cannot entirely eliminate speculation, as it is a part of market operations.
Conclusion: The correct answer is (mathbf{(D)}), as speculation exists in every financial market.
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