SIE practice questionmediumAccount Types – DVP/RVP
A mutual fund manager prefers to settle trades on a delivery versus payment (DVP) basis. What does this mean?
- ATrades can only occur in margin accounts
- BPayment is made before securities are delivered
- CAll orders must be filled at the same price
- DSecurities are delivered only when payment is made✓ Correct answer
Explanation
Why D — Securities are delivered only when payment is made
DVP means securities are delivered to the buyer’s bank when payment is made. Payment before delivery is not required, and DVP is not limited to margin accounts.
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