Looking for the answer to the question below related to Financial Management ?
The latest stock market to come up in India is
C. MCX – stock exchange
D. none of these
The Correct Answer Is:
- C. MCX – stock exchange
The correct answer is C. MCX – stock exchange. The MCX (Multi Commodity Exchange of India Limited) is indeed a prominent stock exchange in India. It’s important to note that MCX primarily focuses on commodity trading rather than traditional equity or stock trading. Let’s delve into why this is the correct answer and why the other options are not applicable:
C. MCX – Stock Exchange:
The Multi Commodity Exchange of India Limited (MCX) is a recognized and leading commodity exchange in India. It is a financial institution that provides a platform for trading a variety of commodities such as gold, silver, crude oil, agricultural products, and base metals.
MCX is known for facilitating commodity futures trading, allowing participants to buy and sell contracts based on the future prices of these commodities.
Here’s why this option is correct:
1. Focus on Commodity Trading:
MCX is primarily known for its focus on commodity trading. It provides a marketplace for individuals and institutions to engage in the buying and selling of commodity futures contracts. These contracts enable participants to speculate on the future price movements of various commodities, serving both hedging and investment purposes.
2. Prominence in Indian Markets:
MCX is one of the major commodity exchanges in India and has played a significant role in the country’s commodity markets. It has a substantial market share and is recognized by regulatory authorities like SEBI (Securities and Exchange Board of India).
Now, let’s briefly explain why the other options are not correct:
A. NSE (National Stock Exchange of India Limited):
The NSE is one of India’s primary stock exchanges, known for trading equity and equity-related products such as stocks, stock futures, and options. While the NSE is a significant financial market in India, it is distinct from MCX in terms of its focus on equities rather than commodities.
B. BSE (Bombay Stock Exchange):
The BSE is another major stock exchange in India that predominantly facilitates the trading of stocks, equity derivatives, and other related financial instruments. Like the NSE, the BSE’s core focus is on equity markets and not commodity trading.
D. None of These:
Option D suggests that none of the provided options are correct. However, the correct answer is indeed option C, as MCX is a well-established commodity exchange in India.
In conclusion, the MCX (Multi Commodity Exchange of India Limited) is a notable stock exchange in India, but it is specifically known for its role in facilitating commodity trading rather than traditional equity or stock trading.
The MCX has gained prominence in India’s commodity markets and provides a platform for participants to engage in commodity futures trading, serving various financial and hedging needs in the commodity sector.
It’s essential to distinguish between different types of exchanges, such as stock exchanges and commodity exchanges, based on their areas of focus and the financial instruments they facilitate trading in.