The purpose of opening a Demat Account with a Depository ...

CBSE Class 12 Business Studies 2026 All Sets Solved Paper

Question : 17 of 21

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The purpose of opening a Demat Account with a Depository Participant (DP) is :

For holding and transferring securities in the Demat form
For entering into an agreement with broker
For making payment to stock exchange for any purchase of securities
For enabling cash transactions in the securities market

Solution:

Just as a bank account holds cash in electronic form, a Demat account holds securities (shares, bonds, debentures) in electronic form. The primary purpose is to eliminate the risks of physical certificates (theft, forgery, or damage) and to facilitate the easy ”holding and transferring” of these securities during trading.

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