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In today’s Commerce class, We will be learning about The Stock Exchange. We hope you enjoy the class!
- Functions of the Stock Exchange.
- Operators at the Stock Exchange.
- Securities dealt with at the Stock Exchange.
- Speculators at the Stock Exchange.
- The Second-Tier Securities Market.
A stock exchange is a specialized market where investors can buy and sell existing securities like shares, stocks, debentures and gill edge securities. It is a part of the capital market.
FUNCTIONS (IMPORTANCE) OF THE STOCK EXCHANGE
- It is a market for buying and selling of hand securities.
- it assists companies to raise capital
- It determines the value (prices) of shares, stock and other securities on a daily basis.
- The prices of shares quoted on the stock exchange serve as an economic indicator.
- It assists the government in raising funds e.g. through development stock.
- It protects investors from any form of fraud.
- It helps to raise the administrative standard of companies by improving financial management and accounting information.
- It provides employment for brokers, jobbers, clerks etc.
- It provides information to investors and also involved in investors education.
- It provides a yardstick for measuring the performance of companies.
OPERATORS AT THE STOCK EXCHANGE
Members operating at the stock exchange are
- Brokers (Stockbrokers)
- Authorized clerk
TYPES OF SECURITIES DEALT IN AT THE STOCK EXCHANGE
- Gilt-edge securities – These are securities issued by the government. This type of securities is very safe as the government cannot default (i.e. fail to pay its debts). They are therefore regarded as being risk – free investment.
- Describe each of the following (a) Stockbrokers (b) Issuing Houses (c) Securities
- Write short notes on the followings; (a) capital market (b) money market
We have come to the end of this class. We do hope you enjoyed the class?
Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.
In our next class, we will continue learning about The Stock Exchange. We are very much eager to meet you there.
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