SIE practice questionmediumSuitability and Customer Profiles
Under FINRA's suitability rules, a registered representative must have a reasonable basis to believe a recommendation is suitable based on the customer's:
- ACredit history and FICO score
- BSocial media activity and online presence
- CFamily members' investment portfolios
- DInvestment profile including objectives, risk tolerance, financial situation, and time horizon✓ Correct answer
Explanation
Why D — Investment profile including objectives, risk tolerance, financial situation, and time horizon
FINRA suitability and SEC Regulation Best Interest require recommendations to be based on the customer's investment profile, including objectives, risk tolerance, financial situation, time horizon, liquidity needs, tax status, and other investments. Credit scores, social media activity, and family members' portfolios are not the required suitability profile.
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