(a). Does a company need to be listed on a stock exchange’s ability to sell its securities through the stock exchange?

Question

Study the following case/situation and express your opinion.

Mr. P has recently got his B.Sc. degree. He has enrolled in a course in the securities market. As a new student of this subject, he has few queries as follows:

(a). Does a company need to be listed on a stock exchange’s ability to sell its securities through the stock exchange?

(b). What is the term used for referring to a stock exchange’s ability to reflect the economic conditions of a country?

(c). Which term refers to the functions of the stock exchange as a provider of a ready market for sale and purchase of security?

Answer 1

(a) Yes, a company needs to be listed on Stock Exchanges to sell its securities through the Stock Exchange.

(b) A Stock Exchange is the “Economic Barometer” and acts as an economic mirror that reflects the economic conditions of a country, eg. Boom, recession period.

(c) The “Liquidity” function is the main function of the Stock Exchange as it provides a ready market for the sale and purchase of securities.