The duty of a broker-dealer firm and its individual brokers to ensure that investment recommendations made to customers are suitable based on a specific customer's investment profile includes all of the following except: (A) Have a reasonable basis for the belief that the recommendation is suitable (B) The belief is based on customer-specific information (C) The size of the recommended trade must not be excessive (D) Refrain from making an investment recommendation if the customer refuses to provide certain customer specific information.

Answers

Answer 1

Answer:

The answer is option "D"

Explanation:

The suitability condition that broker-dealer firms have to adopt includes making investment recommendations on the basis of their applicability in terms of what the customer's profile is. To do this, the firm needs to have adequate and reasonable understanding of the customer, their needs, their risk profile, details of their other investments and their age among several other factors. Firms use these details and then perform their own research, or 'due diligence' to ensure that the recommendations made are appropriate in the customer's context. Options A and B pertain to this criteria and are therefore correct. Option C is also correct since, even if the investment recommendation is in line with the customer's profile, firms must still refrain from making trade recommendations that are excessive in size because they can, among other issues, raise the risk profile of the trade.

Now lets look at option D. Broker-dealers do rely on the customers providing customer specific information so that they can plan investment recommendations accordingly, however, this is not the only practice that is required. Firms need to conduct their own research and due diligence as well. Furthermore, customers may be unwilling to disclose certain information, for example, details of their other investments. In this case, firms need to be cautious and carefully analyse whether they have 'enough' customer specific information to be reasonably certain that the investment recommendation is appropriate. As long as enough information exists to form the reasonable basis, firms do not need to refrain from making recommendations.

Therefore, the correct option is D.

Related Questions

What type of cost remains the same per unit at every level of activity?
A Weak Dollarby The Columbus Dispatch, September 7, 1999If the price of buying a car starts rising in the United States, consumers may need to look no further than the dollar's recent slide against major foreign currencies.On the other hand, economically depressed Midwestern farmers may find it easier to sell surplus grain overseas if a weak dollar makes it cheaper for foreigners to buy U.S. goods.The dollar spent much of last week on the skids, flirting with its lowest level of the year against the Japanese yen...It also has lost ground to the euro.The passage MOST LIKELY relates toA)the national debt.B)the exchange rate.C)the inflation rate.D)the stock exchange
Do you need an LLC if you rap? and What is an LLC?
you have a budget of $3000. You want to buy email addresses, and each address cause $.37. How many addresses can you buy?
True or False: Purchasing savings can have a huge impact on the firm's profit leverage.

A company made a profit of $25,000 over a period of 5 years on an initial investment of $10,000. What is its annualized ROI? . A.) 50%. B.) 40%. C.) 30%.

Answers

A company made a profit of $25,000 over a period of 5 years on an initial investment of $10,000. What is its annualized ROI?

Answer: Out of all the options shown above the one that best represents the annualized ROI is answer choice C) 30%. To solve this you first need to determine the data that will be needed to solve it. In this case the initial investment which is 10,000, the total profit: 25,000, and finally the total number of years: 5. Then we simply use the following formula: Return on Investment = (Gain from Investment - Cost of Investment)/ cost of investment. You then multiply the result by 100% and finally divide by the number of years which in this case is 5.

I hope it helps, Regards.

Answer:

C) 30%

Explanation:

You would most likely find __ in a formal workplace

Answers

You would most like find Strick Rules in a formal workplace

I believe that is the answer

Answer: stict rules

Explanation: just took the test

Researching your company's mission statement will allow you to create a team goal that

Answers

Mission statement is some sort of statement that describe the purpose of the organization.

Which is why Researching your company's mission statement will allow you to create a team goal that Fit your company culture .

Answer:

Is very clever and well written

Engages upper management

Contrasts with other teams

Fits with your company culture

Explanation:

Which of the following is not a pathway to paternity? Select one:a. marriage
b. AOP Legal Document
c. None of the above

Answers

The right answer for the question that is being asked and shown above is that: "C. None of the above." Among the choices, there is none that is not a pathway to paternity. Marriage and AOP Legal Document do.

Which of the following statements is true of the current ratio? The larger the current ratio, the harder it is for the firm to pay its short-term debts. A current ratio below 1.0 signifies a company's inability to pay its short-term liabilities with its current assets. Current ratio is classified under the leverage ratio. Current ratio is computed by dividing the firm's current liabilities by its current assets.

Answers

The correct answer is this one: " A current ratio below 1.0 signifies a company's inability to pay its short-term liabilities with its current assets." It is the statement that presents a true description about the current ratio. Current ratio refers to the liquidity ratio in which the ability of the company is measured as to how they be able to pay short-term and long-term obligations.

Tactical planning would include which of the following?a. Profit goals
b. Design, test, and install the equipment needed to produce a new product line
c. Human resources requirements
d. Return on investment

Answers

Tactical planning would include the following [b. Design, test and install the equipment needed to produce a new product line].
Usually tactical planning the longest kind of planning since it involves all the procedure which is needs to be done to start the work.

Other Questions

Patton Company purchased $1,500,000 of 10% bonds of Scott Company on January 1, 2018, paying $1,410,375. The bonds mature January 1, 2028; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. For the year ended December 31, 2018, Patton Company should report interest revenue from the Scott Company bonds of:

If company XYZ observes a drop in performance following a human resource management decision to eliminate a Friday free lunch for the employees, then this would be an example of a lack of ______ to perform.

According to the U.S. Public Health Service, a "significant financial interest" includes royalty income paid to an investigator and its disclosure is required except _____

What are two techniques of epideictic speech?