Series 7 practice questioneasyProduct Knowledge and Suitability Foundation 1
If a representative does not understand how a non-traded REIT values its shares, the representative should:
- Arecommend it only to accredited investors
- Bavoid recommending it until the product is understood✓ Correct answer
- Csell it with a signed risk disclosure only
- Drely on the customer to evaluate it independently
Explanation
Why B — avoid recommending it until the product is understood
A representative cannot satisfy reasonable-basis suitability without understanding the product. Selling first and learning later would violate the obligation to investigate features, risks, and costs.
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