Series 63 practice questionmediumProhibited Practice: Unreasonable Predictions
A representative tells a client, 'This stock will double in a month.' Under the USA, this statement is:
- APermitted as a sales tactic
- BProhibited as making an unreasonable prediction✓ Correct answer
- CAllowed if based on research
- DPermissible if the client requests a prediction
Explanation
Why B — Prohibited as making an unreasonable prediction
Making unreasonable or exaggerated predictions is prohibited as fraudulent under Section 501. Research basis (C) or client request (D) does not permit such statements.
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