Multiple choice

Which of the following are the essential facilities/benefits provided by a Demat account to an individual to trade the securities in the stock market?

  1. It reduces brokerage charges.

  2. It makes pledging/hypothecation of shares easier.

  3. It enables quick ownership of securities on settlement resulting in increased liquidity.

  4. It avoids confusion in the ownership title of securities.

  5. All of these
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Demat accounts provide multiple benefits: they eliminate paper-based confusion about ownership (D), enable instant electronic transfer and settlement (C), facilitate easy pledging of shares for loans (B), and while they don't directly reduce brokerage charges, the overall efficiency can reduce trading costs (A). Since all the listed benefits are valid advantages of Demat accounts, option E ('All of these') is the correct answer as it encompasses all the individual benefits.

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