In the ________________________________, a securities account can be opened, all shares can be deposited in it. These can be withdrawn/sold at any time, and instruction to deliver or receive shares on behalf of the investor can be given.

Question

'Mudro Infratech' got a short-term contract for building two villas within a period of ten months with the expectation to earn a huge amount of profit. The Works Manager accepted this challenge and completed the work within the given time period. The profit of the company went up by 40 due to this temporary order. The Finance Manager was aware that the company would not earn this huge profit in the near future. So, he decided not to increase dividend per share as earnings for the year had gone up, but not the earning potential of the company.
The factor affecting Dividend Decision being highlighted above is:

Answer 1

Step 1: Understanding the Role of a Depository
A depository is an institution that electronically holds financial instruments like shares and bonds, streamlining trading and investment activities.Step 2: Identifying the Correct Option
- The primary market (A) is where new securities are first offered.
- The stock exchange (B) serves as a venue for trading securities.
- A bank (C) handles financial transactions but does not manage securities in this specific capacity.
- A depository (D) facilitates electronic storage, sale, and transfer of securities for investors.
Conclusion: The correct answer is (mathbf{(D)}), as a depository provides secure safekeeping and administration of securities.

In the ________________________________, a securities account can be opened, all shares can be deposited in it. These can be withdrawn/sold at any time, and instruction to deliver or receive shares on behalf of the investor can be given.

Show Hint

The Correct Option is D

Solution and Explanation

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