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Which institution was established to regulate and control the business of buying and selling securities in an organized manner?
- a)Industrial Development Bank of India (IDBI).
- b)Unit Trust of India (UTI).
- c)National Stock Exchange (NSE).
- d)Stock Exchange.
Correct answer is option 'D'. Can you explain this answer?
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Which institution was established to regulate and control the business...
A stock exchange is an institution established to regulate and control the business of buying and selling securities in an organized manner. It provides a platform for investors to trade securities like shares and debentures.
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Which institution was established to regulate and control the business...
Understanding the Role of Stock Exchanges
The correct answer to the question regarding the institution established to regulate and control the buying and selling of securities is option 'D', the Stock Exchange. Here’s a detailed explanation:
What is a Stock Exchange?
- A stock exchange is a regulated marketplace where securities, such as stocks and bonds, are bought and sold.
- It provides a platform for investors to trade securities in an organized manner, ensuring transparency and fairness.
Functions of Stock Exchanges
- Regulation and Oversight: Stock exchanges are governed by regulatory authorities, such as the Securities and Exchange Board of India (SEBI) in India, which ensures compliance with laws and protects investor interests.
- Liquidity Provision: They facilitate liquidity in the market, allowing investors to buy and sell securities quickly and efficiently.
- Price Discovery: Exchanges help in determining the market price of securities based on supply and demand.
- Market Information: They provide essential information about market trends, enabling investors to make informed decisions.
Comparison with Other Options
- Industrial Development Bank of India (IDBI): Primarily focuses on providing financial support for industrial development.
- Unit Trust of India (UTI): Mainly deals with mutual funds and collective investment schemes.
- National Stock Exchange (NSE): While it is a stock exchange, it is just one of many platforms where trading occurs, not the overarching regulatory body.
Conclusion
In summary, stock exchanges play a crucial role in the financial ecosystem by enabling organized trading of securities, thereby fostering a stable and efficient market environment.
The correct answer to the question regarding the institution established to regulate and control the buying and selling of securities is option 'D', the Stock Exchange. Here’s a detailed explanation:
What is a Stock Exchange?
- A stock exchange is a regulated marketplace where securities, such as stocks and bonds, are bought and sold.
- It provides a platform for investors to trade securities in an organized manner, ensuring transparency and fairness.
Functions of Stock Exchanges
- Regulation and Oversight: Stock exchanges are governed by regulatory authorities, such as the Securities and Exchange Board of India (SEBI) in India, which ensures compliance with laws and protects investor interests.
- Liquidity Provision: They facilitate liquidity in the market, allowing investors to buy and sell securities quickly and efficiently.
- Price Discovery: Exchanges help in determining the market price of securities based on supply and demand.
- Market Information: They provide essential information about market trends, enabling investors to make informed decisions.
Comparison with Other Options
- Industrial Development Bank of India (IDBI): Primarily focuses on providing financial support for industrial development.
- Unit Trust of India (UTI): Mainly deals with mutual funds and collective investment schemes.
- National Stock Exchange (NSE): While it is a stock exchange, it is just one of many platforms where trading occurs, not the overarching regulatory body.
Conclusion
In summary, stock exchanges play a crucial role in the financial ecosystem by enabling organized trading of securities, thereby fostering a stable and efficient market environment.
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Which institution was established to regulate and control the business of buying and selling securities in an organized manner?a)Industrial Development Bank of India (IDBI).b)Unit Trust of India (UTI).c)National Stock Exchange (NSE).d)Stock Exchange.Correct answer is option 'D'. Can you explain this answer?
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