Question : Case Study 29
JKL Ltd. is a company that has placed an order to buy a certain number of shares through its chosen broker.
Question :
What happens if JKL Ltd.'s buy order matches a sell order in terms of price and quantity?
Option 1: The order is canceled
Option 2: The broker decides the trade
Option 3: The trade is executed
Option 4: The settlement process begins
Correct Answer: The trade is executed
Solution : The correct answer is (c) The trade is executed
If JKL Ltd.'s buy order matches a sell order in terms of price and quantity, the trade is executed. When a buy order and a sell order match, it creates a "trade" or a transaction. The broker facilitates the trade, and the shares are transferred from the seller's account to the buyer's account at the agreed-upon price and quantity. The execution of the trade occurs, and the ownership of the shares is transferred accordingly. The settlement process begins after the trade is executed, where the actual transfer of securities and funds is initiated. The order is not canceled or decided by the broker in this scenario; instead, the trade is completed.
What happens if JKL Ltd.'s buy order matches a sell order in terms of price
What step follows after JKL Ltd. places an order to buy shares through its
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