Answer:
Yes, I agree with this statement. Following are the two functions of stock exchange: (i) Providing Liquidity and Marketability to Existing Securities The main function of a stock exchange is the creation of ready market where securities are bought and sold. It gives investors the chance to disinvest and reinvest. This provides both liquidity and easy marketability to already existing securities in the market. (ii) Pricing of Securities Share prices on a stock exchange are determined by the forces of demand and supply. A stock exchange is a mechanism of constant valuation through which the prices of securities are determined. Such a valuation provides important instant information to both buyers and sellers in the market.
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