Purpose of stock market
Capitalist trading both at a domestic and international level wouldnot be possible without the stock market. It is through the stock marketthat the transactions of financial assets occur. These stock markets alsoprovide the world's industrialized nations with a way to conduct trade. This paper looks at how three main purposes of the stock market.First, it explains how the stock market allows individual people to makeinvestments and participate in economic activity. The next part then looksat how the stock market allows companies and corporations to build theirprofits. Finally, the paper then discusses how the various stock exchangesaround the world interact, forming a network for the international economy. One of the most important purposes of the stock market for thenational economy is to stimulate investment. Towards this, the stockmarket provides individual buyers and sellers with a platform to trade While many individual investors still retain the services ofstockbrokers, the advent of Internet technology has increased the number of"day traders," or people who manage their own stock. This is done through
The stock market does this in different ways. The investor's accountwill then be credited with the profits from the sale (Hall 60). Corporate profits By providing a venue for buyers and sellers, the stock market alsobenefits corporations. " This is often seen in the way a corporation releases the initialissue of its new securities available for clients and investors. This price determines the value of the company. Other regional stock exchanges arealso located throughout the country, in cities like Chicago, Boston, LosAngeles, Philadelphia and Miami. With the help ofinvestment bankers, corporations can issue new securities in the "primarymarket. Without the stock market, it would be difficult forindividuals and companies from cities as distant as Cincinnati, Milan andHong Kong to conduct trade and to participate in the increasingly globaleconomy. Corporations then profit from these primary markets (Fontanils 32). The stock market also allows corporations to profit from the primary marketand to use their "value" in the secondary market for activities likeexpansion. The European Association of Securities DealersAutomated Quotation system (EASDAQ) is the major stock market for theEuropean Union (Dalton 15). Conclusion In conclusion, the stock market provides several functions on both anindividual, national and international level. They then log onto their online brokeragecompany's website to send their orders to the floor of the New York StockExchange (NYSE).
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