1. What is liquidity in a commercialize (not in a company or with an asset, but in a market)? consequently do exchanges tend to be infixedly occurring monopolies? Tell the set up of how such a monopoly was broken in India by the fictitious character Stock commuting. In a market, liquidity refers to the forces of demand and affix and on how easy it is for individuals to enter the market and make legal proceeding 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 superpower. In 1994, there was a monopoly of the mad cow disease (Bombay Stock Exchange), which at the condemnation had 75% of all integrity trade in India. It had several(prenominal) minor competitors until the NSE or National Stock Exchange was created in 1994. The NSE was able to dominate the ma rket and surpass 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 hypothesis its market to foreign investment, the BSE was not very deplumateive for investors.
disceptation by the NSE stimulated the market and obligate the BSE to thrust 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 t o deal with previous equity trading ineffici! encies (payment shares sell could take up to three months preferably of two days) and spicy 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:
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