CSEET · Economic and Business Environment · Indian Financial Markets
Which of the following best explains the role of a stock exchange in the secondary market?
A stock exchange provides a regulated platform where investors buy and sell listed securities. This gives them liquidity, as they can exit easily, and allows transparent price discovery through demand and supply. It does not issue shares itself, and the market regulator is SEBI.
- AIt provides a platform for trading listed securities, giving investors liquidity and price discoveryCorrect
- BIt issues fresh shares on behalf of companies and keeps the proceeds
- CIt regulates all companies in India and approves their prospectuses
- DIt lends money to investors to buy shares directly
Explanation
A stock exchange offers a regulated trading platform where buyers and sellers meet, enabling liquidity and transparent price discovery. It does not issue shares or keep proceeds, and regulation of the market is done by SEBI, so the other options are incorrect.
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