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 secondary market in India?
A stock exchange in the secondary market provides a platform to trade securities that are already issued and enables price discovery through buyer and seller interaction. It does not issue fresh shares, fix intrinsic values or guarantee investor profits.
- AProviding a platform for trading of already issued securities and enabling price discoveryCorrect
- BIssuing fresh shares directly to the public on behalf of companies
- CFixing the fundamental value of every listed share
- DGuaranteeing profits to investors who trade on the exchange
Explanation
Secondary market exchanges provide a transparent trading platform for existing securities, and the interaction of buyers and sellers leads to price discovery. Fresh issuance belongs to the primary market. Exchanges do not fix values or guarantee profits.
Did you get it right without looking?
One question tells you little. A timed set on Introduction to the Securities Market shows your real accuracy, how long you take and where you lose marks.
More Introduction to the Securities Market questions
- A broker's client wants to buy shares and the broker is considering how the exchange guarantees completion of trades. Which entity steps in …
- An investor wants exposure to a pooled portfolio managed by a professional, with units issued at NAV and the pool registered with SEBI under…
- A broker's client wants to know the difference between a stock exchange's role and that of a clearing corporation. Which statement is correc…
- Which of the following best describes the role of the secondary market for securities?
- Which of the following is a function of the primary market in the Indian securities market?
- A broker's client wants to buy shares of a listed company and hold them in electronic form. Which institution holds the client's securities …