Question : Case Study 33
XYZ Corporation is a well-established company with shares traded on a stock exchange. The company's management is reviewing the functions of a stock exchange.
Question :
What is the secondary function of a stock exchange that ensures a continuous market for securities?
Option 1: Allocation of resources
Option 2: Regulation of insider trading
Option 3: Providing loans to companies
Option 4: Providing credit rating to companies
Correct Answer: Allocation of resources
Solution : The correct answer is (a) Allocation of resources
The secondary function of a stock exchange that ensures a continuous market for securities is allocation of resources. A stock exchange provides a platform where investors can efficiently allocate their capital by buying or selling securities based on their assessment of the companies listed. This allocation of resources helps ensure a continuous and active market for securities.
Question : Case Study 74
UVW Ltd. is a conglomerate that has recently traded its shares on a stock exchange. The company's management is considering the functions of a stock exchange.
What is the function of a stock exchange that ensures transparency in trading and prevents fraudulent activities?
Option 2: Providing loans to companies
Option 3: Regulation of credit rating agencies
Option 4: Regulation of insider trading
Question : Case Study 85
GHI Corporation is a startup planning to trade its shares on a stock exchange. The company's management is reviewing the roles of stock exchanges.
Option 1: Regulation of insider trading
Option 3: Allocation of resources
Option 4: Regulating credit rating agencies
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile