STOCK EXCHANGE

WHAT IS STOCK EXCHANGE? Organized and regulated financial market where securities (bonds,

notes, shares) are bought and sold at prices governed by the forces of demand and supply.

Stock exchanges basically serve as:- (1) Primary markets where corporations, governments,

municipalities, and other incorporated bodies can raise capital by channelling savings of the investors into productive ventures

(2) Secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system.

FEATURES OF STOCK EXCHANGE

It is an organized market It is a securities market It is an important constituent of capital market i.e., market for long-

term finance It is a voluntary association of persons desirous of dealing in

securities Stock exchange is a voluntary association, its membership is not

open to everybody In a stock exchange, only the members can deal in i.e., buy & sell

securities The members of a stock exchange can buy and sell securities either

as brokers for & on behalf of their clients

IMPORTANT FUNCTION OF STOCK EXCHANGE

Provide central and convenient meeting places for sellers and buyer of securities

Increase the marketability and liquidity of securities Contribute to stability of prices of securities Equalization of price of securities Smoothen price movement Help the investors to know the worth of their holdings Promote the habit of saving and investment Help capital formation Help companies and government to raise funds from the investors Provide forecasting service

BROKER AND JOBBERBROKER: He is one acts as a intermidiary on behalf

of others. A broker in a stock exchange is a commission agent who transacts business in securities on behalf of non members.

JOBBER: He is not allowed to deal with the public directly .He deals with brokers who are engaged with the investors . Thus, the securities is bought by the jobber from members and sells to members who are operating on the stock exchange as broker.

Largest stock exchanges IN THE WORLD LONDON STOCK EXCHANGE NEW YORK STOCK EXCHANGE SHANHAI STOCK EXCHANGE AUSTRALIA STOCK EXCHANGE TOKYO STOCK EXCHANGE HONG KONG STOCK EXCHANGE TORONTO STOCK EXCHANGE DEUTSCHE BORSE BM&F BOVESPA NASDAQ OMX STOCK EXCHANGE

LONDON STOCK EXCHANGE It was the first stock exchange established by East-

India company in 18th century in London. The top gainer of LONDON STOCK EXCHANGE is “Blue chip shares”.

HAPPY INVESTMENT WITH LOTS OF PROFITS

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