Lalita wants to buy shares of Akbar Ente | Class 12 Business Studies Chapter Financial Markets, Financial Markets NCERT Solutions
Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter Financial Markets. This page offers a step-by-step solution to the specific question from Exercise 3, Question 5:
Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Account and a bank account for cash transactions in the securities market. Discuss the subsequent steps involved in the screen-based trading for buying and selling of securities in this case.
.
With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.
Question 5: Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Account and a bank account for cash transactions in the securities market. Discuss the subsequent steps involved in the screen-based trading for buying and selling of securities in this case.
Answer:
Following are the steps involved in the screen-based trading for buying and selling of securities:
-
If an investor wishes to buy or sell any security he has to first approach a registered broker or sub-broker and enter into an agreement with him. The investor has a sign a broker-client agreement and a client registration form before placing an order to buy or sell securities. He has also to provide certain other details and information. These details includes:
a. PAN Number
b. Date of birth and address
c. Educational qualification and occupation
d. Residential status (Indian/ NRI)
e. Bank account details
f. Depository account details
g. Name of any other broker with whom registered
h. Client code number in the client registration form
The broker then opens a trading account in the name of the investor.
-
The investor has to open a ‘Demat’ account or ‘beneficial owner’ (BO) account with a depository participants (DP) for holding and transferring securities in the demat form. He will also have to open a bank account for cash transactions in the securities market.
-
The investor then places an order with the broker to buy or sell shares. Clear instructions have to be given about the number of shares and the price at which the shares should be bought or sold. The broker will then go ahead with the deal at the above mentioned price or the best price available. An order confirmation slip is issued to the investor by the broker.
-
The broker then will go on-line and connect to the main stock exchange and match the share and best price available.
-
When the shares can be bought or sold at the price mentioned, it will be communicated to the broker’s terminal and the order will be executed electronically. The broker will issue a trade confirmation slip to the investor.
-
After the trade has been executed, within 24 hours the broker issues a Contract Note. This note contains details of the number of shares bought or sold, the price, the date and time of deal, and the brokerage charges. This is an important document as it is legally enforceable and helps to settle disputes/claims between the investor and the broker. A unique order code number is assigned to each transaction by the stock exchange and is printed on the contract note.
-
Now, the investor has to deliver the shares sold or pay cash for the shares bought. This should be done immediately after receiving the contract note or before the day when the broker shall make payment or delivery of shares to the exchange. This is called the pay-in day.
-
Cash is paid or securities are delivered on pay-in-day as the deal has to be settled and finalized on the T+2 day. The settlement cycle is on T+2 day on a rolling settlement basis, w.e.f. 1 April 2003.
-
On the T+2 day, the exchange will deliver the share or make payment to the broker. This is called the pay-out day. The broker then has to make payment to the investor within 24 hours of the pay-out day since he has already received payment from the exchange.
-
The broker can make delivery of shares in demat form directly to the investor’s demat account. The investor has to give details of his demat account and instruct his depository participant to take delivery of securities directly in his beneficial owner account.
-
Other Questions of Chapter Financial Markets
-
Popular questions of class 12 Business Studies
-
Recently Viewed Questions of Class 12 Business Studies
Study Tips for Answering NCERT Questions:
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
- Read the question carefully and focus on the core concept being asked.
- Reference examples and data from the chapter when answering questions about Financial Markets.
- Review previous year question papers to get an idea of how such questions may be framed in exams.
- Practice answering questions within the time limit to improve your speed and accuracy.
- Discuss your answers with your teachers or peers to get feedback and improve your understanding.
All businesses are gathering information on customers, products, employees, and expenditures, and someone must make decisions based on the data. That individual is the data analyst. Unlike many career changers imagine, the job is open to a broader cross-section of the population than a typical career change. A lot of working analysts trained in commerce, … Read more
Read More
Are often purchased, talked and planned as being a replacement for another. They aren’t. One safeguards your family’s income in your absence and the other safeguards your family’s savings in the event that someone becomes ill. An examination of what they do, what they do not do, and why they are missing it when one … Read more
Read More
Pay upfront, or pay off less and over time? The truth depends on four factors most consumers will never compare at the same time: the interest rate on the house loan, the interest rate on the savings account, the rate of home price appreciation, and the cost of renting the home until you actually buy … Read more
Read More
Thirty is when the question starts to get raised and you’re able to do something because you know you have the experience—you know you have the responsibility. Here are some ways to consider the choice based on a realistic assessment without idealizing either aspect. Restlessness is one of those things that appears in your early … Read more
Read More
Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 3 , Question 5: Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Acco....
Add Comment