Series 63 practice questionmediumProhibited Practice: Misleading Advertising
A broker-dealer's advertisement claims, 'Our market timing system guarantees you will beat the market.' Under the USA, this is:
- APermissible if based on past performance
- BProhibited as misleading and making an untrue statement✓ Correct answer
- CAllowed if all clients receive the same materials
- DAcceptable if the Administrator approves the ad
Explanation
Why B — Prohibited as misleading and making an untrue statement
Guarantees of results in advertising are misleading and violate Section 501. Past performance (A), distribution (C), or Administrator preapproval (D) do not make such claims permissible.
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