SIE Exam Question 204: Answer and Explanation

Question: 204

A stock trade executed on Wednesday, December 31, will settle on what date?

• A. Monday, January 5
• B. Tuesday, January 6
• C. Wednesday, January 7
• D. Thursday, January 8

Correct Answer: A

Explanation:

Stock trades ordinarily settle on a T+2 schedule, meaning that the settlement date is two business days following the trade date (T). Therefore, a stock trade executed on Wednesday, December 31, would settle on Monday, January 5, which is two business days later since January 1 is a trading holiday and weekends do not count as business days.