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Financial Market Management — CBSE Class 10 board question

Q1. [1]
Mr. Anil owns 500 physical shares of XYZ Ltd. He wants to sell them on the stock exchange but is worried about the risks of holding physical certificates. He needs a quicker and safer way to trade. What should Mr. Anil do ?
  1. (A) Sell the physical share certificates at stock exchange.
  2. (B) Transfer the physical shares to XYZ Ltd. and then sell them.
  3. (C) Open a Demat account with a Depository Participant (DP) and dematerialize his share before selling.
  4. (D) Ignore the risks and sell the shares as they are.
Previously asked in CBSE board exam
2026 92 Q5 (i)
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer

(C) Mr. Anil should open a Demat account with a Depository Participant (DP) and dematerialise his shares, eliminating risks like bad delivery and fake certificates before selling.

Explanation

The source passage clearly states that dematerialisation eliminates risks associated with physical certificates (bad delivery, fake securities, etc.) and ensures immediate transfer of securities. A Demat account with a DP is the correct and safe route to trade on a stock exchange. Physical share certificates cannot be directly traded on modern stock exchanges.

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