Financial Awareness - Risk, Stability & Emerging Finance
What is the primary function of circuit breakers in Indian stock exchanges?
What is the primary function of circuit breakers in Indian stock exchanges?
medium Q14 of 15
Step-by-Step Solution
Step 1: Understand the question
The question asks about the role of circuit breakers in stock exchanges.Step 2: Analyze options
Circuit breakers are mechanisms to pause trading temporarily to prevent panic selling and excessive volatility. Increasing liquidity, changing repo rate, or regulating foreign investments are unrelated functions.Final Answer:
To temporarily halt trading during excessive market falls → Option CQuick Check:
Circuit breakers function = halt trading temporarily ✅
Quick Trick: Circuit breakers act as market emergency stops.
Common Mistakes:
- Confusing circuit breakers with monetary policy tools.
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