Series 63 practice questioneasyReasonable Basis Suitability
Before recommending a new, complex security to any client, the agent must first determine:
- AThat the security is suitable for at least some investors✓ Correct answer
- BThat every client already owns the security
- CThat the client has requested the security
- DThat the security has performed well in the past year
Explanation
Why A — That the security is suitable for at least some investors
Reasonable basis suitability requires agents to understand a product and its risks before recommending it to any customer (USA Section 402). Client request, ownership, or past performance are not relevant to this standard.
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