How The Stock Exchange Operates - SS2 Economics Past Questions and Answers - page 1
What is the primary function of the stock exchange?
To facilitate the trading of securities
To regulate financial markets
To provide investment advice to investors
To issue stocks to companies
(The primary function or role of the stick exchange is in facilitating the trading of securities and providing a platform for companies, to raise capital and for investors to buy and sell securities)
How are the prices of stocks determined on the stock exchange?
By the forces of supply and demand
By the stock exchange itself
By the government
By the companies issuing the stocks
What is the role of brokers in the stock exchange?
To act as intermediaries between investors and the stock exchange
To set prices for stocks
To regulate financial markets
To issue stocks to companies
What is the purpose of clearing and settlement on the stock exchange?
To transfer ownership of stocks from the seller to the buyer
To transfer payment from the buyer to the seller
Both a and b
None of the above
(After a trade is executed, the stock exchange ensures that the trade is properly cleared and settled. This involves transferring ownership of the stock from the seller to the buyer and transferring payment from the buyer to the seller)
How do companies raise capital through the stock exchange?
Companies raise capital by issuing stocks to investors through the stock exchange.
What type of market data does the stock exchange provide to market participants?
The stock exchange provides real-time information on stock prices and other market data to investors, brokers, and other market participants.