Final answer:
The New York Stock Exchange's primary role is to serve as a marketplace for investors to buy and sell shares of stock and not directly to raise funds for corporations, which occurs initially through an IPO. The exchange provides liquidity and efficiency, setting market values and allowing investor participation in corporate growth.
Step-by-step explanation:
The major function of the New York Stock Exchange (NYSE) is not fundamentally to raise funds for corporations; rather, its primary function is to provide a platform where stocks and bonds can be bought and sold by investors. So, the answer to the student's question is b. False.
Corporations initially raise funds through a process called an initial public offering (IPO), where they sell their shares to the public on an exchange like the NYSE. Once these shares are in the public domain, the NYSE serves as a secondary market where these shares can continuously be traded between investors. It is important to note that after the initial sale of shares during the IPO, the company does not directly receive funds from these transactions; the exchange facilitates the trading between investors who set the market price through supply and demand.
The function of facilitating a liquid and efficient market provides many indirect benefits to corporations, such as determining market value and creating access to a broader investor base. It also allows investors to have a stake in various companies and benefit from their growth and profitability.