Financial Market Management — CBSE Class 10 board question

(1) Purpose of a Contract Note in the Secondary Market:

A contract note is a written confirmation issued by a broker to the investor after a trade is executed on a stock exchange. It serves as a legal document that records the details of the transaction — such as the number of shares bought/sold, price, date, and brokerage charges. It acts as proof of the transaction between the broker and the investor.

(2) Contribution to Transparency and Accountability:

A contract note ensures transparency by providing the investor with complete details of the trade, leaving no room for manipulation or hidden charges. It promotes accountability as the broker is legally bound by the terms stated in it. In case of any dispute, the contract note serves as legal evidence, protecting the investor's interests.

Source: Financial Markets, Secondary Market (Stock Exchange)

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• Examiners expect students to define contract note first, then explain its purpose clearly.
• For Part (2), the key terms to mention are transparency, accountability, and legal evidence/proof — these fetch marks directly.
• Avoid writing vague lines; be specific about what details the contract note contains.
• Each sub-part is 2 marks, so 2 clear points per sub-part are sufficient.