SIE Exam Question 975: Answer and Explanation

Question: 975

Which of the following is a settlement method in which the transfer of securities and associated payment occurs simultaneously? It ensures that the final transfer of a security occurs only if the final transfer of the associated payment also occurs.

• A. Delivery vs. Free
• B. Delivery vs. Payment
• C. Delivery vs. Receipt
• D. Delivery vs. Settlement

Correct Answer: B

Explanation:

Delivery vs. Payment (DVP) is a settlement method in which the transfer of securities and associated payment occurs simultaneously. It ensures that the final transfer of a security occurs only if the final transfer of the associated payment also occurs.