SIE practice questioneasyGuarantees Against Loss
A registered representative tells a customer, 'I guarantee you won't lose money on this investment.' This statement is:
- AProhibited under FINRA rules✓ Correct answer
- BPermitted only for government securities
- CAcceptable if the representative genuinely believes it
- DAcceptable if made in writing
Explanation
Why A — Prohibited under FINRA rules
Guaranteeing a customer against loss is strictly prohibited under FINRA Rule 2150. No representative may guarantee a customer against losses or promise specific returns. All investments carry risk, and such guarantees are misleading and fraudulent. This prohibition applies regardless of the representative's intention, the type of security, or whether the guarantee is verbal or written. Even sharing in losses or profits with a customer is prohibited (with limited exceptions requiring firm approval).
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