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Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A): Demat account refers to an account which an Indian citizen must open with the DPs to trade in listed securities in electronic form.
Reason (R): Depository is like a bank in which an investor can deposit and withdraw his shares.
  • a)
    Both A and R are true and R is the correct explanation of A
  • b)
    Both A and R are true, but R is not the correct explanation of A
  • c)
    A is true, but R is false
  • d)
    A is false, but R is true
Correct answer is option 'B'. Can you explain this answer?
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Direction: In the question given below are two statements labelled at...


Explanation:

Assertion (A) and Reason (R) Analysis:

- Assertion (A): Demat account refers to an account which an Indian citizen must open with the DPs to trade in listed securities in electronic form.
- Reason (R): Depository is like a bank in which an investor can deposit and withdraw his shares.

Evaluation:

- Assertion (A) is true because a Demat account is indeed necessary for an Indian citizen to trade in listed securities in electronic form. This account holds shares and securities in electronic form.
- Reason (R) is also true as it correctly explains the role of a depository. A depository functions similar to a bank where an investor can deposit and withdraw shares instead of cash.

Conclusion:

- Both Assertion (A) and Reason (R) are true, and Reason (R) is a correct explanation of Assertion (A).
- Therefore, option 'B' is the correct choice for this question, as both statements are true and Reason (R) justifies Assertion (A) in the context of Demat accounts and depositories.
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Community Answer
Direction: In the question given below are two statements labelled at...
Investors who want to get securities in electronic form opens a Demat Account. From this account one can hold shares of various companies in the dematerialised/ electronic form.
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Direction: Read the following text and answer the questions given below:“Unicon Securities Pvt. Ltd.” was established to deal in securities. It was registered as a stockbroker with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to trade in securities listed at these exchanges. It is also a depository participant with CDSL and NSDL. In the first three years, it developed its business successfully. After that, the composition of Board of Directors changed. Some customers complained to the customer care centre of the company that shares purchased by them and for which the payment has been duly made, were not transferred to their Demat Accounts by “Unicon Securities Pvt. Ltd.”. The executive of customer care centre promised the aggrieved customers that their shares will be transferred to their respective Demat Accounts very soon. But the company delayed the matter and didn’t transfer the shares of the customers to their Demat Accounts. This eroded investors’ confidence and multiplied their grievances. On regular inspection and by conducting enquiries of the brokers involved, the Securities and Exchange Board of India (SEBI) was able to detect this irregularity.Q. By not converting and transferring the shares to the investors’ Demat Account, i.e., electronic form, which process was not followed?

Direction: Read the following text and answer the questions given below:“Unicon Securities Pvt. Ltd.” was established to deal in securities. It was registered as a stockbroker with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to trade in securities listed at these exchanges. It is also a depository participant with CDSL and NSDL. In the first three years, it developed its business successfully. After that, the composition of Board of Directors changed. Some customers complained to the customer care centre of the company that shares purchased by them and for which the payment has been duly made, were not transferred to their Demat Accounts by “Unicon Securities Pvt. Ltd.”. The executive of customer care centre promised the aggrieved customers that their shares will be transferred to their respective Demat Accounts very soon. But the company delayed the matter and didn’t transfer the shares of the customers to their Demat Accounts. This eroded investors’ confidence and multiplied their grievances. On regular inspection and by conducting enquiries of the brokers involved, the Securities and Exchange Board of India (SEBI) was able to detect this irregularity.Q. Identify the step of trading procedure in a stock exchange which has not been followed by “Unicon Securities Pvt. Ltd.”.

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Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): Demat account refers to an account which an Indian citizen must open with the DPs to trade in listed securities in electronic form.Reason (R): Depository is like a bank in which an investor can deposit and withdraw his shares.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'B'. Can you explain this answer?
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Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): Demat account refers to an account which an Indian citizen must open with the DPs to trade in listed securities in electronic form.Reason (R): Depository is like a bank in which an investor can deposit and withdraw his shares.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): Demat account refers to an account which an Indian citizen must open with the DPs to trade in listed securities in electronic form.Reason (R): Depository is like a bank in which an investor can deposit and withdraw his shares.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): Demat account refers to an account which an Indian citizen must open with the DPs to trade in listed securities in electronic form.Reason (R): Depository is like a bank in which an investor can deposit and withdraw his shares.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): Demat account refers to an account which an Indian citizen must open with the DPs to trade in listed securities in electronic form.Reason (R): Depository is like a bank in which an investor can deposit and withdraw his shares.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
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