Question

The stock exchange is the barometer of the economic condition of the country. Give reason.

Answer 1

• Stock exchange provides important information useful to the various parties. For example, information about changes in the price of securities, flow of purchase and sale of securities, etc.
• Such information serves as an important guide for investors, companies, government, SEBI, etc.
• The information is useful for the government for formulating economic policy and financial policy.
• The information also describes the economic condition and growth of company and nation. ‘
• Studying the information, the investor can understand the equity in which he should invest so as to get best returns from his saving.
• Hence, the stock exchange is called the barometer of the economic condition of the country (or the investor).