Question

Q. Stock exchange indexes do not reflect the status of the real economy for which of the following are the reasons?

Select the correct answer using the codes given below:

• A.
  1 and 2 only
• B.
  2 and 3 only
• C.
  1 and 3 only
• D.
  1, 2 and 3

Answer 1

The correct option is D

1, 2 and 3
Explanation:

Stock exchange indexes does not reflect the status of the real economy, reasons:

1. Falling rate of interest.
2. Speculative Trading.
3. Agriculture sector is not covered.
4. Less Participation.
5. Limited number of companies are covered by the indexes: For example BSE SENSEX is based on 30 companies.
6. Unorganised sector.