Series 7 practice questionmediumSeminars and Public Appearances — Use of Hypothetical Performance
A seminar presenter uses a hypothetical portfolio to illustrate potential outcomes for a new ETF. What must the presenter do to remain compliant?
- ADisclose that the performance is hypothetical and not indicative of actual results.✓ Correct answer
- BSubmit all materials to FINRA for approval.
- COnly use actual historical performance data.
- DGuarantee the audience will achieve similar results.
Explanation
Why A — Disclose that the performance is hypothetical and not indicative of actual results.
If hypothetical performance is used, the representative must clearly disclose that it is not representative of actual results and may not predict future outcomes.
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