1. The market is considered as the major central place for the sales and purchases of securities.
2. It provides an avenue for investment of surplus fund.
3. It enables companies to raise capital to meet their requirements in business.
4. Investors can easily transfer their securities to one another.
5. The government can raise long-term funds (bonds) for project development through the stock exchange.
6. The participants are being provided with investment and managerial advisory services.
7. The information about daily transactions on securities is provided by the exchange.
8. The prices of stock can be determined by the price mechanism that is, the interplay of demand and supply.
9. The stock exchange provides a forum for brokers and underwriters to buy off unsold shares of quoted companies and later sell them at a profit.
10. The capital market provides long-term loans to companies in the form of debentures.
11. The stock exchange market increases the liquidityLiquidity refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price. Liquid assets refer to cash on hand,... More of listed securities by creating a permanent, market for exchanging them expeditiously.
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