capital_market22__40

May 19th, 2015
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Stock Exchange is an organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the market forces of demand and supply. Stock exchanges basically serve as primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channeling savings of the investors into productive ventures; and secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk

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IntroductionStock Exchange is an organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the market forces of demand and supply. Stock exchanges basically serve as primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channeling savings of the investors into productive ventures; and secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system. To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but there is increasingly less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is by members only. Trades in the older exchanges are conducted on the trading floor of the exchange itself, by shouting orders and instructions. On modern exchanges, trades are conducted over telephone or online. Almost all exchanges are auction exchanges where buyers enter competitive bids and sellers enter competitive orders through a trading day. The first stock exchange was opened in Amsterdam in 1602; the three largest stock exchanges in the world are New York Stock Exchange (NYSE), London Stock Exchange (LSE), and Tokyo Stock Exchange (T

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