The standard settlement cycle for corporate securities, which includes common stock, is two business days after the trade date (T+2). The trade date in this scenario is Thursday, August 2. The first business day after the trade (T+1) is Friday, August 3. The second business day (T+2) is Monday, August 6, as weekends are not considered business days. Therefore, the transaction must settle no later than Monday, August 6.

A. Friday, August 3: This represents a T+1 settlement cycle, which is standard for U.S. Treasury securities and options, not for regular way stock trades.

C. Tuesday, August 7: This would be T+3 settlement. While this was the previous standard, the settlement cycle for equities was shortened to T+2 in 2017.

D. Wednesday, August 8: This represents a T+4 settlement, which is not a standard settlement cycle for any common security type.

1. U.S. Securities and Exchange Commission (SEC), Rule 15c6-1(a): This rule establishes the standard settlement timeframe. It states, "...a broker or dealer shall not effect or enter into a contract for the purchase or sale of a security... that provides for payment of funds and delivery of securities later than the second business day after the date of the contract..." This directly mandates the T+2 settlement for stocks.

2. FINRA Securities Industry Essentials (SIE) Examination Content Outline: Section 4.1.1, "Knowledge of... Settlement (e.g., T+1, T+2)," confirms that understanding different settlement cycles is a required competency for the exam.

3. Bodie, Z., Kane, A., & Marcus, A. J. (2021). Investments (12th ed.). McGraw-Hill Education. In Chapter 3, "How Securities Are Traded," the section on "Clearing and Settlement" discusses the move to a T+2 settlement cycle for stocks and bonds in the U.S. market as of 2017.