There are all together 6 questions subject - Principle of financial managment Question 1 and 2 (7 marks each and have to write 500 words each ) = 14 marks and 1000 words Question 3 and 4 no words...

Assessment Task – Tutorial Questions Assignment
Unit Code: HA1022
Unit Name: Principles of Financial Management
Q.1 Five (5) principal functions of a modern and efficient stock exchange
The five principle functions of a modern and efficient stock exchange in most of the developed as well as in the developing countries are as follows:
1. The establishment of security market with a range of financial instruments: This includes the new issue or the primary stock market as well as the secondary mark where the equity or the ordinary share capital, preferences shares, subordinated debt during bankruptcy and the convertible bond or notes in the form of listed debt instruments are traded. It also deals with derivatives in the form of wa
ants, future and options.
2. It helps to afford a security trading system: Almost all the stock exchanges ba
ing a few have implemented a state of art infrastructure for online and electronic trading system. The Australian stock exchange, New York stock exchange, NASDAQ in the developed countries like Australia and United States and Bombay Stock Exchange and National Stock Exchange in the developing countries like India. The buy or sell orders are placed online by the investors through the registered
okers. Therefore, the system helps to equal the orders and helps in the execution of the trade.
3. Provides a automated clearing and settlement system: once the investors invests in the stock markets through registered
okers, it take generally T+3 days to settle the stock transaction and gets reflected in the system. In few countries this time period is reduced further with the implementation of more advanced and efficient technology. In Australia the system that is used to settle the securities is called CHESS better known as Clearing House Electronic Su
egister System. The system does dual work. It records both the transfer of ownership as well as facilitates the financial transaction settlement thereby removing the risk of settlement.
4. Regulation and supervising the integrity of the stock exchange markets: For
inging efficiency and integrity of the market the stock exchanges sets various policies and guidelines which needs to be adhered to. This helps to maintain a behaviour which is followed throughout the organization where the exchanges monitors the behaviours of the companies listed on the exchanges and that of the authorised stock
okers attached with the exchanges. Non-adherence to this can lead to penalties, fines, delisting of the company and revoke of the
oker’s license.
5. It helps to provide a secured market through sharing of information to gain the confidence of all the participants: The basic information which is prevailing and is available in the stock exchange is the price of a stock. Thus, due to investor purchase and selling of securities the prices of the shares are expected to change and will impact the future performance of the company listed in the exchange. Therefore, as per the guidelines of the stock exchanges and the regulators it is compulsory to update and disclosure any material information which can impact the price of the stock and is available with the exchanges.
Q.2 Two (2) main types of stock
okers that an investor may choose to use
There are basically two main types of stock
okers which the investors may choose for trading are (1) Full- Service Broker (2) Discount Broke
Full Service Broker: A full service
oker offers a wide variety and diverse ranges of stock and securities trading services along with research analysis...