SIE practice questionmediumBreakpoints
A client is eligible for a breakpoint but is not informed by their representative. This is considered:
- AA violation of FINRA fair dealing rules✓ Correct answer
- BA standard business practice
- CA permissible omission if the client didn’t ask
- DA requirement only for institutional investors
Explanation
Why A — A violation of FINRA fair dealing rules
A is correct; representatives must disclose breakpoints to retail clients. B, C, and D are false—failure to disclose is a regulatory violation regardless of client type.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Investment Companies & Packaged Products questions
- An investor has previously purchased $30,000 in a mutual fund family and wants to invest $20,000 more to reach a…
- Which statement best describes how open-end mutual funds are priced for purchases and redemptions?
- What happens if a closed-end investment company wants to raise more capital after its initial public offering (IPO)?
- An investor notices that an ETF is trading at a price slightly higher than its net asset value (NAV). What does this…