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Which of the following best describes the role of Institutional Investors in the Indian securities market?

medium Q7 of 15
Financial Awareness - Risk, Stability & Emerging Finance
Which of the following best describes the role of Institutional Investors in the Indian securities market?
AThey are individual investors trading occasionally
BThey are entities investing large sums on behalf of others
CThey regulate the securities market
DThey act as intermediaries between buyers and sellers
Step-by-Step Solution
  1. Step 1: Define Institutional Investors

    Institutional investors are organizations like mutual funds, insurance companies, and pension funds investing large amounts on behalf of clients.
  2. Step 2: Differentiate from other roles

    Individual investors trade occasionally; regulators oversee markets; intermediaries facilitate trades but do not invest on their own behalf.
  3. Final Answer:

    They are entities investing large sums on behalf of others → Option B
  4. Quick Check:

    Institutional investors = large-scale investors ✅
Quick Trick: Institutional investors manage pooled funds professionally.
Common Mistakes:
  • Confusing institutional investors with brokers or regulators.
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