Functions of a Stock Exchange: 

1. Providing Liquidity and Marketability to Existing Securities:

Stock Exchange provides a ready and continuous market for the sale and purchase of securities.

2. Pricing of Securities: 

A stock exchange is a mechanism of constant valuation through which the prices of securities are determined. It is based on the forces of demand and supply. 

3. Safety of Transaction: Stock exchange has its own well defined rules and regulations. This ensures safety and fair dealings to investors.

4. Contributes to Economic Growth:

Stock exchange provides a platform by which savings are channelised into the most productive investment proposals, which leads to capital formation and economic growth.

5. Providing Scope for Speculation:

Stock exchange provides scope within the provisions of Law for speculation in a restricted and controlled manner.

6. Economic barometer: 

A stock exchange serves as a barometer of a country’s economic condition. Price trends in stock exchange indicate whether economy is going through boom or depression.