Observation

Many candidates did attempt this question performed well in the question

The expected responses are.

   (a)  Functions of the Stock Exchange

1. It is a market for buying and selling securities.
2. It assists governments, companies and individuals to raise capital by helping to change their securities to cash.
3. The values of shares, stocks and other securities are determined by the stock exchange.
4. It provides a financial market for those wishing to invest their money in companies’ shares.
5. Being specialists in the stock market, members of the stock exchange are able to advise investors on which securities to buy.                                                                                   106
6. It affords investors opportunity to resell old shares or second hand securities through the stockbrokers who work directly in the stock exchange.
7. It ensures maximum security for investment.

                                                                                                       
(b)   (i)    Debentures
A debenture is a debt which is issued by private or public companies. It is a borrowed capital which is generally backed by assets of the issuer and is issued for specific purposes /it is a long term security that has a fixed rate of interest at the date of issue.
(ii)     Bonds
Bonds are fixed income instruments that are issued by governments and private organizations to raise capital. They are secured and have maturity periods when both the principal amount and the interest would be paid back to the investor.
(iii)     Shares
Shares are units of capital which express part ownership of the company. Their owners are referred to as shareholders and they receive income called dividend.
 (iv)      Stock
A stock refers to all of the shares into which ownership of the corporation is divided. The stock could be divided into common and preferred shares / Stocks can be defined as bundle of shares grouped together that attracts interest with ordinary shareholders.