Series 63 practice questionmediumGuarantees
An agent suggests to a client that he will 'personally make up for any losses' if an investment declines. Which USA rule applies?
- APermitted with oral consent from the client
- BStrictly prohibited as a guarantee✓ Correct answer
- CAllowed for direct family members
- DPermitted if the Administrator is notified
Explanation
Why B — Strictly prohibited as a guarantee
Any guarantee against client losses—oral or written—is prohibited under USA Section 402. Neither client relationship nor notification to the Administrator permits such conduct.
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