Series 63 practice questionmediumProhibited Practice: Blanket Guarantees
An agent tells a client, 'I will personally make up for any losses you incur.' Under the USA, this is:
- APermitted as long as the agent discloses it in writing
- BProhibited as a guarantee against loss✓ Correct answer
- CPermitted for high-net-worth clients
- DAcceptable if the firm approves it
Explanation
Why B — Prohibited as a guarantee against loss
Guaranteeing a client against loss is expressly prohibited by USA Section 501. Disclosure (A), client status (C), or firm approval (D) do not make it permissible.
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