Explain the benefits that are enjoyed investors because of the existence of organized security exchanges.

CPA-Financial-Management-Section-3 Revision kit

The benefits that enjoyed investors due to existence of organized security exchanges
e.g. Nairobi Stock Market are:
– The firms are able to issue new shares and raise capital easily
– The exchange is a vehicle of mobilizing savings in the economy
– Since investors can buy new shares, this enable them to diversify their investments and reduce risk
– It is a means through which foreign direct investment (FOI) can flow into the economy
– Investors are able to know the price of their securities as determined demand and supply forces in the stock exchange.

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