Question : Case Study 73
RST Inc. is a technology startup aiming to raise funds for its research and development projects. The company's management is considering the trading procedures on a stock exchange.
Question :
After a trade is executed, how long does it typically take for settlement to occur?
Option 1: 1 business day
Option 2: 3 business days
Option 3: 7 business days
Option 4: 10 business days
Correct Answer:
3 business days
Solution : The correct answer is (b) 3 business days
The typical time it takes for settlement to occur after a trade is executed on a stock exchange is 3 business days. This period is often referred to as "T+3," where "T" represents the trade date, and the settlement occurs three business days after the trade is executed. This allows for the necessary administrative and financial processes to be completed, including the transfer of funds and ownership of the securities between the buyer and the seller. The specific settlement time can vary by country and market regulations.




