Series 7 practice questionmediumGood Delivery Requirements
A customer is delivering physical stock certificates to settle a sale of 340 shares. Which of the following would constitute good delivery?
- AThree certificates of 100 shares and one certificate of 40 shares✓ Correct answer
- BSeven certificates of 50 shares each, minus 10 shares
- CThirty-four certificates of 10 shares each
- DOne certificate of 200 shares and one certificate of 150 shares
Explanation
Why A — Three certificates of 100 shares and one certificate of 40 shares
Good delivery requires that physical certificates be in denominations that are divisible into units of 100 shares (round lots) without creating fractional certificates. Three certificates of 100 shares (300 total) plus one certificate of 40 shares equals 340 shares and constitutes good delivery because each certificate is in an acceptable denomination. Certificates for odd amounts that do not add up evenly to the total, or certificates that would require splitting, may not constitute good delivery.
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