Series 63 practice questioneasyChurning
An agent excessively trades in a client’s account to generate commissions, without regard to the client’s objectives. This is known as:
- ASwitching
- BChurning✓ Correct answer
- CFront-running
- DDiscretionary trading
Explanation
Why B — Churning
Churning is excessive trading to generate commissions, prohibited under antifraud provisions. Switching (A) is replacing mutual funds; front-running (C) is trading ahead of clients; discretionary trading (D) is permitted with client approval.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,051+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Remedies & Administrative Provisions questions
- Under the USA, which of the following would be considered making an untrue statement of a material fact?
- Which of the following is an example of market manipulation prohibited under USA Section 501?
- An agent in State Y commits fraud in the sale of a security to a resident of State Z. Under the USA, who may take…
- A registered agent in State X is discovered to have engaged in dishonest and unethical business practices. Which of the…
- An agent in State X tells clients, 'Because I am registered, you can be confident I have been endorsed by the state…
- An agent fails to mention a pending lawsuit against an issuer when recommending its stock. Under the USA, this is…
- A broker-dealer arranges for trades between accounts it controls to inflate trading volume and attract investors. Which…
- An agent in State X tells a client, 'This security is registered with the Administrator, so it is guaranteed to be…