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Question : Case Study 33

XYZ Corporation is a well-established company with shares traded on a stock exchange. The company's management is reviewing the functions of a stock exchange.

Question : 

What is the secondary function of a stock exchange that ensures a continuous market for securities?

Option 1: Allocation of resources
 

Option 2: Regulation of insider trading
 

Option 3: Providing loans to companies

 

Option 4: Providing credit rating to companies


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Allocation of resources


Solution : The correct answer is (a) Allocation of resources

The secondary function of a stock exchange that ensures a continuous market for securities is allocation of resources. A stock exchange provides a platform where investors can efficiently allocate their capital by buying or selling securities based on their assessment of the companies listed. This allocation of resources helps ensure a continuous and active market for securities.

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