Question

A primary dealer buys Treasury Securities in a competitive bid at the weekly Treasury Auction. Settlement between the dealer and the Treasury occurs:

A on issue date
B the next business day after issue date
C the next business day after the auction
D 5 business days after issue date

Answer 1

Answer:

Correct answer is (A) on issue date

Explanation:

Primary U.S. Government dealers bids in the weekly Treasury Auctions. Auctioning is conducted on Monday and Tuesday. The issue date of the securities is done at following Thursday and if the bid is won by the primary dealer, settlement between the dealer and the Treasury is occurs on the issue date.