Question

What role does the stock exchange play in better allocation of capital?

a.

It discourages investment in profit-making companies

b.

It hinders the process of raising fresh capital for companies

c.

It actively trades shares of loss-making companies

d.

It facilitates the allocation of investor's funds to profitable channels

Answer: (d).It facilitates the allocation of investor's funds to profitable channels Explanation:The stock exchange helps in allocating investor's funds to profitable channels by actively trading shares of profit-making companies.

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Q. What role does the stock exchange play in better allocation of capital?

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