Roles of stock exchange in an economy
Facilitates investment: This is achieved by providing a ready market for buying and selling securities. The market improves liquidity of securities thereby making investors willing to accept lower rates of return. This means a lower cost of capital to business.
Stabilizing security prices: The relatively inexpensive and ontinous stock exchange market test the value of securities stabilizing security prices and thus facilitating new financial growth.
Aids the digestion of new security issues and facilitates their successful floatation.
Publishes useful information about the various companies for guidance of both investors and large companies.
Helps in directing large part of savings by members of the public to invest in large stock companies which plays a vital role in the general development of the company.
Charles W answered the question on December 27, 2017 at 11:06
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