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 step follows after JKL Ltd. places an order to buy shares through its broker?
Option 1: Dematerialization
Option 2: Execution of the order
Option 3: Settlement
Option 4: Opening a demat account
Correct Answer:
Execution of the order
Solution : The correct answer is (b) Execution of the order
The broker will proceed to execute the order by attempting to find a seller willing to sell the desired number of shares at the specified price or at the best available price in the market. The execution involves completing the transaction and confirming the purchase of shares on behalf of JKL Ltd. Dematerialization and opening a demat account are essential steps in the trading process, but they typically occur before placing the order. Settlement is a subsequent step where the actual transfer of securities and funds occurs after the order is executed.
