Stock Exchanges and Their Functions

Hard Equity Markets And Instruments Stock Exchanges

In the realm of stock exchanges, various structures exist to facilitate trading. One type of exchange operates as a centralized marketplace where buyers and sellers engage in transactions under a specific regulatory framework. Another common structure is the over-the-counter (OTC) market, which allows for trading directly between parties without a centralized exchange's oversight. With this context in mind, consider the following question regarding the role and functionality of stock exchanges.

Stock exchanges solely operate as venues for initial public offerings (IPOs).

The major stock exchanges operate primarily as centralized marketplaces where securities are traded under a defined set of regulations.

Stock exchanges cannot provide liquidity to investors as they only facilitate trades between companies and institutional investors.

Hint

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