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  3. The Stock Exchange Who Needs the stock Exchange Everybody does. Nine out of ten of the adult population of this country

The Stock Exchange Who Needs the stock Exchange Everybody does. Nine out of ten of the adult population of this country

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问题                                 The Stock Exchange
    Who Needs the stock Exchange
    Everybody does. Nine out of ten of the adult population of this country save or invest in one form or another. The Stock Exchange provides a way in which this money can be put to work.
    If you are buying a car, a television, or a washing machine, you may pay for it out of your savings, or borrow from a bank or hire-purchase company. If you are buying a house, you may get a mortgage from a building society.
    A business needing new machinery, or new premises, has similar options. Some of the costs can be met from profits kept in the business, in other words, paid for out of savings, but as a company grows, this becomes increasingly difficult.
    From your point of view as a saver, you may be saving up for something definite, such as a down payment on a car or house, or simply in order to have money available, should some unforeseen emergency arise.
    Either way, you will not be prepared to entrust your savings to a company seeking cash for expansion unless you can be sure you will be able to get it out again. If the company has meantime invested your money in launching a new product, it will not be able simply to hand it back. Nor can it usefully hand over a bit of the factory roof, or two or three tons of soap, to redeem the investment.
    How then can these conflicting requirements be met?
    The answer is through the Stock Exchange. When the saver needs his money back, he does not have to go to the company with whom he originally placed it. Instead, he sells his shares to some other saver who is seeking to invest his money.
Large companies need a way to; tap the savings of the public at large.
   An oil-field in the North Sea can cost hundreds of millions of pounds to bring into production. Not until the oil is flowing can it contribute to the profits of the company that discovered it.
   The same problem, on a smaller scale, faces practically every company trying to develop new products and create new jobs.
    There can be little prospect of raising, the sort of sums needed from friends and acquaintances,  and while banks may be willing to provide short-term finance, they are generally reluctant to provide money on a permanent basis for long-term projects.
    So companies turn to the public, inviting people to lend them money, or take a share in the business in exchange for a share in future profits. This they do by issuing stocks and shares in the business through the Stock Exchange. By so doing they can mobilize the savings of individuals and institutions, both in the U. K. and overseas.
    Many of the services needed both by industry and each of us are provided by government or our local authorities.  Without hospitals, roads, electricity, railways, this country could not function. All these, require continuous expenditure on new equipment and development if they are to serve us properly, requiring more money than is raised through rates and taxes alone.
    The government, local authorities, and nationalized industries therefore frequently need to borrow money to finance major capital spending, and they, too, come to the Stock Exchange.
    There is hardly a man or woman in this country whose job or whose standard of living does not depend on the ability of his or her employers to raise money to finance new development. In one way or another, this new money must come from the savings of this country. The Stock Exchange exists to provide a channel through which these savings can reach those who need finance.
    Who Are the Savers?
    Many attempts have been made to find out how many savers there are in the United Kingdom and Republic of Ireland. It is difficult to be sure, because one person may have a savings bank account, another a bank deposit book, another a building society account and another all three. It has never been determined exactly how any people own shares directly. At the time of the Royal Commission on The Distribution of Wealth, which took evidence in 1971, there were believed to be about 2 million individual shareholders. However, the launch of British Telecom in December 1984 may have brought the figure to nearer 3 million.
    Another one million invest in shares through unit trusts and investment trusts, and around 14 million save through life assurance. On top of this are the various pension schemes, which depend on the income they receive from their stocks and shares to provide the pensions when their contributors retire. At the last count, it was calculated that over 11 million people were paying into such schemes, and more than 2 million were already receiving pensions from them.
    It is not only employers who run pension schemes. Trade unions, too, run benevolent funds for their members. The machinery for converting small savings into long-term finance is as highly developed here as in any country in the world. All these institutions,  whether unit trusts, investment trusts, insurance companies, pension funds or trade unions, invest through the Stock Exchange, in order to earn profits for their policy-holders,  share-holders and pensioners.
    How Is the Stock Exchange Different from Other Markets?
    A market is a place where people meet to buy and sell. Most markets deal in goods that have a practical use--the producers on the one hand, provide a steady supply of the goods traded, and the consumers, on the other, provide a steady demand.
    The Stock Exchange deals with a different sort of commodity. The goods on sale, in themselves, have no intrinsic value. Stock and share certificates are evidence of your stake in a company, or, in the case of "Gilts", that you have lent money to the government by buying government stock. They are important documents that should be kept carefully, but they are not useful in the sense that foodstuffs or raw materials for industry are.
    There is a further complication because, however many shares a company may have in issue, they all belong to somebody. How then can the stock market ensure that there are always shares available to be bought, and buyers available to buy them? How can there be a market at all, if the public all want to buy at the same time?
    Stock exchanges in other countries have found different solutions to the problem of providing a continuous and free market in securities, with varying degrees of success.
    In Britain, the essential freedom is provided by a special group of Stock Exchange Member Finns, the Jobbers, who constitute a unique feature of the British market system.
    In other countries, Broken attempt to match up buyers and sellers with each other directly. Here, the Jobbers act as stallholders in the market. At these stalls a Broker can buy or sell for his client whatever quantity of shares he wishes. There is no need to hunt for a matching amount; the Jobber will provide one, and channeling all deals in this way provides immense flexibility. Unlike Brokers, who are agents for their clients and are paid by commission, Jobbers deal as principals, buying and selling shares at their own risk..
    What Is the History of the stock Exchange?
    Dealings in stocks and shares began with the merchant ventures in the 17th Century.  Gradually an informal market developed around the coffee houses in the City of London.  In 1773 "New Jonathan’s" Coffee House became the Stock Exchange, though it was not formally constituted until 1802, with some 550 subscribers and 100 clerks. Though London was overwhelmingly the largest exchange (until the 1914-1918 war it was the world’s largest) the growth of the Industrial Revolution prompted the establishment of local share markets in other parts of the country. More than 30 of them at the peak. These markets first began moves towards amalgamation in 1890, when the Council of Associated Stock Exchanges was formed. By 1967 the "Country, Exchanges had grouped themselves into six Regional Exchanges, and in 1973 all seven Exchanges in the British Isles amalgamated to form the Stock Exchange of Great Britain and Ireland, with Member Firms scattered from Aberdeen to the Channel Islands and from Lancaster to Limerick.
One major difference between the Stock Exchange and other markets is that the Stock Exchange deals with goods with______.
选项
答案no intrinsic value
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