Series 63 practice questionmediumMateriality Standard
Under the USA, a fact is considered 'material' if:
- AIt is important to the Administrator
- BA reasonable investor would consider it significant in making an investment decision✓ Correct answer
- CIt is known only to the agent
- DIt is disclosed in the prospectus
Explanation
Why B — A reasonable investor would consider it significant in making an investment decision
Materiality relates to what a reasonable investor would view as important for investment decisions. Administrator concern (A), agent knowledge (C), or inclusion in a prospectus (D) are not the defining factors.
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