Question : Assertion: Stock exchanges provide a platform for buyers and sellers to trade securities.
Reason: Stock exchanges facilitate the issuance of new securities to the public.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Solution : The correct answer is (b) Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
The assertion is true. Stock exchanges do provide a platform or marketplace where buyers and sellers can come together to trade existing securities.
The reason is true but not the correct explanation of the assertion. While stock exchanges do facilitate the trading of existing securities, they are not primarily platforms for the issuance of new securities to the public. The primary platform for the issuance of new securities is the primary market, where initial public offerings (IPOs) or additional offerings are conducted. Stock exchanges facilitate the trading of these already-issued securities in the secondary market.
Question : Assertion: Stock exchanges perform the function of providing liquidity to securities.
Reason: Investors can easily buy and sell securities on stock exchanges.
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