Financial Industry Regulatory Authority (FINRA) Practice Exam

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What is the regular way settlement time for T-bonds?

Same day
Next business day
Second business day
Fifth business day

The correct answer is: Next business day

The regular way settlement time for T-bonds, or Treasury bonds, is typically the second business day after the trade date. This is often referred to as "T+2," which means that if a transaction occurs on a given day, the settlement—meaning the exchange of cash and securities—will occur two business days later. This settlement time frame allows for necessary processing and transfer of securities, ensuring that both parties have adequate time to fulfill their obligations. In the context of financial securities, understanding settlement times is crucial for managing cash flow and ensuring compliance with trading regulations. Other types of securities may have different settlement times, making it important to recognize that T-bonds specifically adhere to the T+2 standard.