Question on: SS2 Economics - How The Stock Exchange Operates
What is the purpose of clearing and settlement on the stock exchange?
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A
To transfer ownership of stocks from the seller to the buyer
B
To transfer payment from the buyer to the seller
C
Both a and b
D
None of the above
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Correct Option: C
(After a trade is executed, the stock exchange ensures that the trade is properly cleared and settled. This involves transferring ownership of the stock from the seller to the buyer and transferring payment from the buyer to the seller)
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