Economics · Stock Market Regulation
How do 'Circuit Breakers' (Circuit Filters) function in stock market exchanges during periods of extreme volatility?
- 1By permanently closing trading accounts of institutional investors involved
- 2By removing margin requirements to speed up rapid transaction processing
- 3By automatically increasing leverage to enhance trading volume
- 4By temporarily halting trading to prevent panic selling and allow price discovery✓
Correct answer
By temporarily halting trading to prevent panic selling and allow price discovery
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