Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Markets

Question:

Arrange the steps of trading procedure of stock exchange in the correct sequence

A. Delivering the shares

B. Placing an Order

C. Opening a Demat Account

D. Execution of the order

E. Settlement of transaction

Choose the correct answer from the options given below :

Options:

C, A, B, D, E

C, B, D, A, E

B, A, D, C, E

B, C, A, E, D

Correct Answer:

C, B, D, A, E

Explanation:

The correct answer is option (2) : C, B, D, A, E

1. Opening a Demat Account: The first step is to open a Demat account with a Depository Participant (DP) to hold the shares in electronic form. Therefore, option C matches the first step.

2. Placing an Order: The investor places an order with a broker to buy or sell shares of a particular company at a specific price. Therefore, option B matches the second step.

3. Execution of the Order: The broker executes the order by matching it with a corresponding order from another investor. Therefore, option D matches the third step.

4. Delivering the Shares : After the execution of the order, the shares are delivered to the Demat account of the investor. Therefore, option A matches the fourth step.