Class 12 Finance Important Chapter 12 Methods of Trading in a Stock Exchange

Class 12 Finance Important Chapter 12 Methods of Trading in a Stock Exchange Solutions English Medium As Per The New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 12 Finance Important Solutions in English and select need one. AHSEC Class 12 Finance Additional Notes Download PDF. HS 2nd Year Banking Additional Solutions.

Class 12 Finance Important Chapter 12 Methods of Trading in a Stock Exchange

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. ASSEB Class 12 Banking Additional Question Answer are part of All Subject Solutions. Here we have given HS 2nd Year Finance Important Solutions English Medium for All Chapters, You can practice these here.

Methods of Trading in a Stock Exchange

Chapter: 12

IMPORTANT QUESTION AND ANSWER

Short Questions and Answers: 

1. What is offline stock trading?

Ans: Offline stock trading is the process where investors buy or sell stocks by placing orders through a broker, usually via phone calls or in person. It is more expensive than online trading but offers personalized advice from the broker.

2. What is day trading?

Ans: Day trading involves buying and selling stocks within the same trading day, sometimes within minutes or hours. The goal is to profit from small price movements using technical analysis and quick decision-making.

3. What is a demat account?

Ans: A demat account, short for dematerialized account, is used to hold securities like shares and bonds in electronic form, replacing the need for physical certificates and enabling quick, secure transactions.

4. Name two main stock indices in India.

Ans: The two main stock indices in India are the BSE Sensex, which tracks the top 30 stocks on the Bombay Stock Exchange, and the Nifty 50, which represents the top 50 stocks on the National Stock Exchange.

5. What is a contract note in stock trading?

Ans: A contract note is a legal document issued by a broker after a trade is executed. It contains details of the number of shares, prices, trade date, time, and brokerage charges.

6. What does T+2 settlement mean?

Ans: T+2 settlement means that all stock transactions are settled two days after the trade date. If you buy or sell a stock on Monday, settlement occurs on Wednesday.

7. What is the purpose of stock indices?

Ans: Stock indices serve as barometers of market performance and sentiment by tracking a representative group of stocks. They help investors assess market trends and compare stock performance.

8. Who is a depository participant (DP)?

Ans: A depository participant is an agent of the depository, such as a bank or broker, who maintains securities account balances for investors and manages the transfer and holding of securities in electronic form.

9. What is passive investment?

Ans: Passive investment is a strategy where investors buy a portfolio of securities that closely follows a stock market index, minimizing the need for active research and stock selection.

10. What is hedging in stock trading?

Ans: Hedging is a strategy used by traders and investors to limit their risk exposure in financial assets by using instruments like options or futures.

Fill in the Blanks:

1. The process of buying and selling stocks using a digital platform provided by online brokers is called ____________ trading.

Ans: Online.

2. In the T+2 settlement cycle, trades are settled ____________ days after the transaction date.

Ans: Two.

3. The account used to hold securities in electronic form is called a ____________ account.

Ans: Demat.

4. ____________ trading involves buying and selling stocks within the same day.

Ans: Day.

5. The ____________ is a benchmark index in India that tracks the top 30 companies listed on the Bombay Stock Exchange.

Ans: Sensex.