Stock Market

STOCK MARKET

DEFINITION OF 'STOCK MARKET'

The market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, the stock market is one of the most vital components of a free-market economy, as it provides companies with access to capital in exchange for giving investors a slice of ownership in the company. The stock market makes it possible to grow small initial sums of money into large ones, and to become wealthy without taking the risk of starting a business or making the sacrifices that often accompany a high-paying career

CHARACTERISTIC OF A STOCK MARKET:

* Making available cost-effective trading platforms

* Bundling of liquidity by concentrating supply and demand

* Guaranteeing the fungibility, or interchangeability, as well as the identical structuring of a particular category of security

* Ensuring the greatest possible transparency for investors

* Providing information on prices and volume

ROLE OF STOCK MARKET EFFECTS ON THE ECONOMY

The stock market has been assigned an important place in economic development through provide for entrepreneurs and governments assembling resources which provide liquidity & improve the scheduling the activities & resources and enhance prospects of long term economic growth. Without a stock exchange, savings & economic progress and productive efficiency- would remain underutilized. In the old days, the task of mobilization and allocation of savings could be attempted by a much less specialized institution than the stock exchanges. But as business and industry expanded and the economy assumed more complex nature, the need for 'permanent finance' arose. Entrepreneurs needed money for long term whereas investors demanded liquidity – the facility to convert their investment into cash at any given time. The stock market provides listed companies with a platform to raise long-term capital and also...