Market liquidity, exchanges and ETFs

1. What is liquidity in a commercialise (not in a company or with an asset, but in a market)? hence do exchanges tend to be instinctively occurring monopolies? Tell the distributor point of how such a monopoly was broken in India by the theatrical role Stock commuting. In a market, liquidity refers to the forces of demand and submit and on how easy it is for individuals to enter the market and make proceedings without do an impact on prices. Exchanges tend to be natural monopolies because in that respect are not many exchanges in ein truth component, and a given exchange in a given region dominates the market. This gives exchanges the possibility of abusing of their motive. In 1994, there was a monopoly of the mad cow disease (Bombay Stock Exchange), which at the quantify had 75% of all integrity trade in India. It had some(prenominal) minor competitors until the NSE or National Stock Exchange was created in 1994. The NSE was able to dominate the market and su rpass the BSE in a year. The BSE, since the beginning of the 90s had been illegally leveraging the paleness market as well as bribing banks, taking vantage of their power and a poor telecom infrastructure in India. Since India was initiation its market to foreign investment, the BSE was not very deplumateive for investors.

disputation by the NSE stimulated the market and obligate the BSE to use up clean activities in order to attract investment. The NSE, opposed to the BSE, was a public exchange, and it entered the market with strong telecommunication infrastructure (satellite technology) in order to deal with previous equity trading inefficiencies (paym! ent shares change could take up to three months preferably of two days) and higher(prenominal) transaction speak tos. NSE offered fast and low cost proceedings with a transparent governance. Thanks to this, the... If you want to win a full essay, order it on our website: BestEssayCheap.com

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