Question : Case Study 32
RST Enterprises is a conglomerate that wants to trade its shares on a stock exchange. The company's management is in the process of selecting a brokerage firm.
Question :
What role does the selected brokerage firm play in the trading process for RST Enterprises?
Option 1: Matching buy and sell orders
Option 2: Transferring ownership of shares
Option 3: Facilitating transactions
Option 4: Listing on stock exchange
Correct Answer: Facilitating transactions
Solution : The correct answer is (c) Facilitating transactions
The selected brokerage firm plays the role of facilitating transactions in the trading process for RST Enterprises. Brokerage firms act as intermediaries that facilitate the buying and selling of securities on behalf of their clients. They enable transactions by connecting buyers and sellers, executing trades, providing market research and advice, managing accounts, and ensuring compliance with regulations. The brokerage firm is crucial in facilitating smooth and efficient transactions on the stock exchange for RST Enterprises. Matching buy and sell orders is more related to the stock exchange itself. Transferring ownership of shares is part of the settlement process after a trade is executed. Listing on the stock exchange is a separate process where a company's shares are listed and made available for trading on the exchange.
Question : Case Study 82
XYZ Enterprises is a startup that aims to trade its shares on a stock exchange. The company's management is reviewing the concept of executing an order.
What is the primary purpose of the settlement process in trading?
Option 3: Determining share prices
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