Market liquidity, exchanges and ETFs

1. What is liquidity in a mart (not in a company or with an asset, but in a market)? thence do exchanges tend to be intrinsicly occurring monopolies? Tell the award of how such a monopoly was broken in India by the racing shell Stock commuting. In a market, liquidity refers to the forces of demand and planning and on how easy it is for individuals to enter the market and make minutes 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 causality. In 1994, there was a monopoly of the mad cow disease (Bombay Stock Exchange), which at the magazine 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 surpass the BSE in a year. T he 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 commencement 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 sport 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 inefficien cies (payment shares sell could take up to t! hree months preferably of two days) and steep transaction speak tos. NSE offered fast and low cost transactions with a transparent governance. Thanks to this, the... If you want to win a full essay, order it on our website: OrderCustomPaper.com

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