Question

Statement-I: The basic function of a Stock Exchange is the creation of a continuous market where securities are bought and sold.
Statement-II: The Stock Exchange provides both liquidity and easy marketability to already existing securities in the market.

• A. Statement-I is true and Statement-II is false.
• B. Statement-II is true and Statement-I is false.
• C. Both the Statements are true.
• D. Both the Statements are false.

Hint:

Stock exchanges play a critical role in ensuring liquidity, price discovery, and continuous trading for securities.

Answer 1

The Correct Option is C

Step 1: Interpreting Statement-I.
The creation of a continuous market is a fundamental function of stock exchanges. It ensures regular trading of securities, providing opportunities for buying and selling. Step 2: Interpreting Statement-II.
Liquidity and marketability are crucial for stock exchanges, allowing investors to easily convert securities into cash. This is achieved by maintaining an active market for securities. Conclusion: Both statements correctly describe the functions of a stock exchange, making (C) the correct answer.