Series 63 practice questionmediumSuitability and Recommendations
A newly licensed agent recommends a high-yield bond to every client without reviewing their investment objectives. Which suitability obligation is violated under the USA?
- ACustomer-specific suitability✓ Correct answer
- BReasonable basis suitability
- CQuantitative suitability
- DBest execution
Explanation
Why A — Customer-specific suitability
Customer-specific suitability means recommendations must fit each client’s profile (USA Section 402). Reasonable basis is about the product, quantitative suitability relates to excessive trading, and best execution is irrelevant here.
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