Function of Stock Exchanges

Very Easy Equity Markets And Instruments Stock Exchanges

In the context of equity investments, stock exchanges play a crucial role in facilitating the buying and selling of shares. An individual or institution interested in purchasing or selling shares must typically do so through a stock exchange. One well-known stock exchange is the New York Stock Exchange (NYSE).

Which of the following accurately describes the primary function of a stock exchange?

To issue new securities directly to investors.

To provide a marketplace where securities can be bought and sold.

To regulate the overall economy by setting interest rates.

Hint

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