Series 7 practice questionmediumDiscretion and Account Supervision 1
A customer asks a representative to exercise time and price discretion only for the current business day without written authorization. What is the best response?
- AWritten trading authorization is always required even for same-day price and time discretion
- BThe representative may also change the security and share amount
- CTime and price discretion may be exercised for that day only✓ Correct answer
- DThe representative may transfer funds to a third party without instructions
Explanation
Why C — Time and price discretion may be exercised for that day only
Discretionary activity is heavily supervised because it gives the representative authority to act without obtaining contemporaneous consent for every trade detail. FINRA rules allow limited same-day time and price discretion, but broader trading discretion requires proper written authorization and supervision.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 755+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Opens & Maintains Customer Accounts questions
- A customer asks a representative to accept a written discretionary trading authorization. What is the best response?
- Which statement best describes transfer on death registration registration?
- A customer asks a representative to request a trusted contact person on a retail account application. What is the best…
- Which statement best describes community property registration?