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.
Choose the correct option from the following:
Statement-II : The Stock Exchange provides both liquidity and easy marketability to already existing securities in the market.
Choose the correct option from the following:
Show Hint
- Statement-I is true and Statement-II is false
- Statement-II is true and Statement-I is false
- Both the Statements are true
- Both the Statements are false
The Correct Option is C
Solution and Explanation
Both statements accurately describe stock exchange functions:
Statement I Analysis:
1. Market Creation: - Provides trading platform (NSE/BSE trading floors) - Ensures price discovery through bid-ask spreads
2. Continuity: - Regular trading hours (9:15 AM-3:30 PM in India) - Market makers ensure constant liquidity
Statement II Analysis:
1. Liquidity Provision: - Enables quick conversion to cash - Example: Blue-chip stocks can be sold instantly
2. Marketability: - Standardized listing requirements - Electronic settlement systems (NSDL/CDSL) Interrelation: - Continuous market (I) enables liquidity (II) - Both are SEBI-recognized primary functions
Final Answer: (C) Both the Statements are true
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- GreenTech Solutions, a renewable energy company, focuses on achieving financial stability and growth through robust financial management. The company ensures efficient allocation of business finance to expand operations, adopt new technology, and maintain a competitive edge. Its financial planning is centered on long-term sustainability, balancing profitability with eco-friendly initiatives.
To optimize its capital structure, GreenTech maintains a balanced mix of debt and equity, minimizing the cost of capital while ensuring financial flexibility. The firm undertakes thorough capital budgeting processes to evaluate projects like setting up new solar farms, ensuring only viable investments are pursued. Tools like Net Present Value (NPV) and Internal Rate of Return (IRR) guide decision-making.
GreenTech’s dividend decision aligns with its growth strategy. While retaining a significant portion of earnings for reinvestment, the company ensures consistent dividends to satisfy shareholders. This approach strengthens investor confidence while funding expansion plans.
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Through prudent financial strategies, GreenTech achieves its goal of profitability and sustainability, setting an example in the renewable energy sector.- CUET (UG) - 2025
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