Stock Exchange

Read the below information provided and answer the question that follows:

A Stock Exchange is the place where investors go to buy/sell their shares . Once a company's public offering is complete, it gets listed in a stock exchange. After listing it would be available for trading to all investors in the stock exachanges where they are listed. In India we have two major stock exchanges. They are:

1. The National Stock Exchange (NSE) &

2. The Bombay Stock Exchanges (BSE)

National Stock Exchange:

The NSE is India's largest and the worlds third largest stock exchange in terms of Transaction volumes &

amounts. The NSE is based out of Bombay. The NSE has set up its trading platform as a nation-wide, fully

automated screen based system. This enables anyone in any part of the country to trade on shares listed

in the NSE.

NSE Index or NIFTY:

The NSE Index or the Nifty Index as it is popularly known, is the index of the performance of the 50 largest & most profitable, popular companies listed in the index. Each company that is part of the index has its own weightage in the value of the Index. The value of the Nifty Index is the weighted average of the prices of these 50 companies.

Bombay Stock Exchange:

The BSE is the oldest stock exchange in Asia. It is situated in Dalal Street in Mumbai. It is the third largest stock exchange in south Asia and the tenth largest in the world. BSE has over 5000 companies that are listed in it. The objectives of the BSE are similar to that of the NSE. BSE also uses the latest technologies in the IT field to provide a single place where traders from across the world can buy/sell shares in the

Indian share market.

BSE Index or SENSEX:

The BSE Index or the Sensex as it is popularly known, is the index of the performance of the 30 largest & most profitable, popular companies listed in the index. Each company that is part of the index has its own weightage in the value of the Index. Since the number of companies is lesser, the index variations are higher when compared to the Nifty index.

Question:

1. Do you think stock exchanges follow a market structure . If yes, name the type of market it follows and further laid down the characteristics of that market structure. Also find how the price of a stock is established in that market structure.