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NEW QUESTION: 1
Ms. Newbie is a newly-minted registered representative. Mr. Oldman saunters into her office, becomes infatuated with her, opens an account, and signs a document giving Ms. Newbie discretionary authority over the account. Mr. Oldman is 68 years old, retired, lives on a fixed income, and pays taxes at the lowest marginal tax rate available. His stated investment objectives are capital preservation and income. Ms.
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A. Ms. Newbie has a reasonable sexual harassment case against Mr. Oldman for putting her in such a position.
B. Ms. Newbie has done a remarkable job as a newly-minted representative of allocating at least a fourth of Mr. Oldman's funds appropriately.
C. Although Ms. Newbie's asset allocation for Mr. Oldman is less than optimal, she is in no danger of losing her license or any other penalty, given that she has been given discretionary authority over the account.
D. Ms. Newbie may lose her license before she gets started in the business for making an unauthorized transaction.
Answer: D
Explanation:
Explanation/Reference:
Explanation: If Ms. Newbie invests ¼ of Mr. Oldman's investment monies in a periodic payment, deferred, variable annuity, given his age and his investment objectives, she may lose her license before she gets started in the business for making an unauthorized transaction. Even though she has discretionary authority over the account, she must still ensure she selects investments that are suitable for her client. A deferred, variable annuity clearly does not match Mr. Oldman's investment objectives. The value of the contract fluctuates, for one thing, and for another, there will be no income from it initially since it is a deferred annuity, and it probably has a surrender charge as well.
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When using a redundant pair of LTMs, it is most advantageous to use them in an
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B. False
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Answer: A
Explanation:
References:
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