Why is the stock exchange important in an economy?









A stock market is a network of transactions in the form of stocks or shares, instead of money. In other words, it is a platform through which shares of companies are issued and traded. They are also called equity markets.

       Stock markets play important roles in financing as they provide companies with options to raise capital while also giving investors a part of ownership in these companies. Those buying the shares are called ‘shareholders’.

       The stocks or shares are traded through stock exchanges. The National Stock Exchange and the Bombay Stock Exchange are the two prominent stock exchanges in India.

       The largest and the most influential stock exchange in the world is the New York Stock Exchange (NYSE).