Question

Which of the following statements are TRUE about a regular way stock trade effected in a cash account? I Payment is required in part Payment is required in full III/ Settlement occurs the same business day IV Settlement occurs in 2 business days AC) I and III (BO) 1 and Ⅳ CO I and III DO II and IV
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Answer #1

The time required between trade date and settlement date differs depending on the trading instrument is called as settlement period. The settlement time is symbolized as T+ the number of days to settlement. The following table will help to understand the settlement days required.

Name of the security Time require for settlement
Certificate of deposit T+ 0 (that is on the same day)
Mutual fund T+ 1 (that is on the next day)
Stocks, Bonds, Municipal securities (As per The Securities and Exchange Commission in September 2017) T+ 2 (that is on the next two day)

So as per the Securities and Exchange Commission, the regular way of stock trade affected in cash account –the Payment is required in full and settlement occurred in 2 business days.

          So the answer is D (that is II and IV).

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