How The Stock Exchange Operates - SS2 Economics Past Questions and Answers - page 1

1

What is the primary function of the stock exchange?

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A

To facilitate the trading of securities

B

To regulate financial markets

 

C

To provide investment advice to investors

D

To issue stocks to companies

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2

How are the prices of stocks determined on the stock exchange?

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A

By the forces of supply and demand

B

By the stock exchange itself

 

C

By the government

D

By the companies issuing the stocks

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3

What is the role of brokers in the stock exchange?

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A

To act as intermediaries between investors and the stock exchange

B

To set prices for stocks

C

To regulate financial markets

D

To issue stocks to companies

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4

What is the purpose of clearing and settlement on the stock exchange?

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A

To transfer ownership of stocks from the seller to the buyer

B

To transfer payment from the buyer to the seller

C

Both a and b

D

None of the above

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5

How do companies raise capital through the stock exchange?

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6

What type of market data does the stock exchange provide to market participants?

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