1.
The use of a Demat account protects one from the following except
Correct Answer
B. Loss on account of fraud
Explanation
A Demat account is a digital form of holding securities, such as stocks and bonds, eliminating the need for physical certificates. It provides a secure and convenient way to hold and trade securities. Loss on account of fraud refers to situations where someone intentionally deceives or tricks an individual to gain unauthorized access to their account or steals their securities. However, a Demat account does protect against such frauds by providing secure login credentials, encryption technologies, and regular monitoring of transactions. Therefore, the correct answer is Loss on account of fraud.
2.
Delivery failures can be caused by all of the following except
Correct Answer
A. Long distance
Explanation
Delivery failures can be caused by postal delay, signature mismatch, and loss of certificate. However, long distance is not a factor that typically causes delivery failures. The distance between the sender and recipient may affect the duration of delivery, but it does not directly cause failures in the delivery process.
3.
Which of these is unavoidable for a Demat account holder?
Correct Answer
D. High transaction cost
Explanation
A demat account is an electronic account used to hold securities in a digital format. One of the unavoidable aspects of having a demat account is the high transaction cost. When buying or selling securities, there are various charges involved such as brokerage fees, transaction charges, and taxes. These costs are necessary for the smooth functioning of the stock market and are incurred by the demat account holder for every transaction made. Therefore, high transaction costs are an inevitable part of having a demat account.
4.
As of March 2016, how many depository participants were registered with SEBI?
Correct Answer
D. 538
Explanation
In March 2016, there were 538 depository participants registered with SEBI.
5.
What is the role of banks in the dematerialization process?
Correct Answer
B. The update accounts of investors
Explanation
Banks play a crucial role in the dematerialization process by updating the accounts of investors. This means that banks are responsible for recording and reflecting any changes or transactions made by investors in their demat accounts. This includes activities such as buying or selling securities, transferring shares, or any other updates related to the investor's holdings. By performing these updates, banks ensure that the demat accounts accurately reflect the investor's current holdings and facilitate smooth and efficient trading in the securities market.
6.
How many forms of charges are recorded for Demat accounts?
Correct Answer
D. Four main charges
Explanation
There are four main charges recorded for Demat accounts.
7.
Concerning charges on a Demat account which of these is odd?
Correct Answer
B. Legal protection fee
Explanation
The odd one out in this list is the "Legal protection fee." This is because while the other charges mentioned, such as custodian fee, annual maintenance fee, and account opening fee, are common charges associated with a Demat account, the legal protection fee is not typically charged for a Demat account. It is more commonly associated with insurance or legal services.
8.
All of these banks do not charge account opening fee save for:
Correct Answer
D. International Merchant Bank
Explanation
The given answer states that the International Merchant Bank charges an account opening fee, while the other three banks (ICICI Bank, AXIS Bank, and HDFC Bank) do not. This implies that out of the given options, only the International Merchant Bank requires customers to pay a fee when opening an account.
9.
Which of these document is not required for opening demat account?
Correct Answer
C. Date of birth certificate
Explanation
The correct answer is "Date of birth certificate". While Aadhar card, Income Tax Return, and Address Proof are all commonly required documents for opening a demat account, a date of birth certificate is not typically necessary. The other documents provide important information such as identification, income, and address verification, but the date of birth can usually be verified through other means such as the Aadhar card or other identification documents.
10.
When did the use of demat accounts start in India?
Correct Answer
C. 1996
Explanation
The use of demat accounts started in India in 1996. This means that before this year, investors in India had to hold physical share certificates to trade in the stock market. The introduction of demat accounts revolutionized the Indian stock market by allowing investors to hold their securities in an electronic format, eliminating the need for physical certificates and simplifying the trading process.