Series 7 Exam Question 293: Answer and Explanation

Question: 293

All of the following are good delivery for a trade of 930 shares EXCEPT

  • A. 1 certificate for 900 shares, 1 for 30 shares
  • B. 2 certificates for 400 shares each, 2 for 50 shares each, 2 for 15 shares each
  • C. 4 certificates for 200 shares each, 10 for 13 shares each
  • D. 4 certificates for 200 shares each, 13 for 10 shares each

Correct Answer: C

Explanation:

C. To determine good delivery, always look at the shares. The certificates must be in multiples of 100 shares (for example, 100, 200, 300, and so on), divisors of 100 shares (1, 2, 4, 5, 10, 20, 25, and 50), or shares that add up to 100 (for example, 80 + 20, 75 + 15, 60 + 30 + 10, and so on). Choice (A) is okay because 900 is a multiple of 100 and the odd lot portion (30 shares) is exempt. Choice (B) is fine because 400 is a multiple of 100, 50 is a divisor of 100, and the odd lot portion (30 shares) is exempt. Choice (D) works because 200 is a multiple of 100 and 10 is a divisor of 100. Choice (C) is the bad one (in this case, the one you're looking for) because even though 200 is a multiple of 100, 13 doesn't divide into 100 evenly.

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