NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market
Which of the following is a key function of a stock exchange in the primary and secondary segments of the Indian securities market?
A stock exchange provides an organised trading platform for listed securities, enabling price discovery and liquidity. It does not frame securities laws, which is SEBI's role, nor does it guarantee returns or issue securities on behalf of companies.
- AProviding a platform for trading of listed securities with price discovery and liquidityCorrect
- BIssuing securities directly to investors on behalf of companies without any intermediary
- CActing as the regulator that frames securities laws for the market
- DGuaranteeing a minimum return on all listed securities to investors
Explanation
A stock exchange provides a transparent trading platform where price discovery and liquidity are made possible for listed securities. Frameworks of law are made by SEBI and Parliament, not by exchanges. No exchange guarantees returns on securities.
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