Paragraph on “Stock Exchanges” complete paragraph for Class 9, Class 10, Class 11 and Class 12

Stock Exchanges

To collect money, to finance projects, companies and governments sell shares in those companies to the public. In exchange for pre-determined amounts, certificates of holdings in these companies are issued, these are known as shares, stocks and bonds. One may buy a share for a company for a small amount initially but if the company becomes profitable then the value of the share may multiply and people may be willing to buy such shares at a higher price. Other companies whose share values may drop because of losses and people may decide to sell their shares. The place where such buying and selling is done is called a stock exchange. Share trading was initially done in coffee houses but a need was felt to have a regular place where people could buy and sell them and it was in the year 1138 that the first stock exchange was formed in Paris, then in 1611, in Amsterdam and the London stock exchange in 1773.