Chapter 02 : Sales Supervision - Customer Accounts Flashcards
1
Q
If a customer changes his address, where and when must notification of the change be sent?
A
Notification must be sent to the customer’s old address within 30 days of the change.
2
Q
May an RR and a client share in an account?
A
Yes, with firm approval and provided the sharing in gains and losses is proportionate to their investment.
3
Q
True or False: Names appearing on the OFAC List are customers who had a previous business relationship with the firm.
A
False. The list shows the names of suspected terrorists and criminals.
4
Q
May a custodian remove funds from a custodial account?
A
Yes, but only for the benefit of the minor.
5
Q
______ power of attorney allows a person to buy or sell securities, transfer assets, or have check writing privileges.
A
Full power of attorney allows a person to buy or sell securities, transfer assets, or have check writing privileges.
6
Q
The formula for determining equity in a short margin account is: ____________ - ____________ = Equity
A
The formula for determining equity in a short margin account is: Credit Balance - Short Market Value (SMV) = Equity
7
Q
When a client dies, instructions will be provided by the _________________________.
A
When a client dies, instructions will be provided by the executor/administrator.
8
Q
After receiving client authorization, whose written approval is required to exercise discretion in the client’s account?
A
A partner, officer, or other appropriately registered official of the member firm
9
Q
The ________________ Agreement describes the customer’s pledging of securities as collateral to the BD.
A
The Hypothecation Agreement describes the customer’s pledging of securities as collateral to the BD.
10
Q
Not held orders allow for what level of discretion?
A
Time and price of execution
11
Q
Who may enter orders in a joint account?
A
Any owner named on the account
12
Q
After a transfer request has been validated, the MSRB requires the transfer to be completed within ____ business days.
A
After a transfer request has been validated, the MSRB requires the transfer to be completed within three business days.
13
Q
A client with $3,000 of SMA has buying power of $________.
A
A client with $3,000 of SMA has buying power of $6,000 (the SMA balance x 2).
14
Q
Where will excess equity be recorded?
A
The Special Memorandum Account (SMA)
15
Q
To open an account under the USA PATRIOT Act rules, is a client’s Social Security number a requested or required item?
A
Required
16
Q
If owned for ____ days, open-end investment company (mutual fund) shares may be used as collateral in a margin account.
A
If owned for 30 days, open-end investment company (mutual fund) shares may be used as collateral in a margin account.
17
Q
True or False: Money may be withdrawn from a joint account in one owner’s name.
A
False. Any checks should be in both parties’ names.
18
Q
The formula for determining equity in a long margin account is: ____________ - __________ = Equity
A
The formula for determining equity in a long margin account is: Long Market Value (LMV) - Debit Balance = Equity
19
Q
True or False: Customers are required to sign the Loan Consent Agreement.
A
False. Signing the agreement is optional.
20
Q
True or False: If a stock is shorted and a dividend is declared, the short seller must pay the lender the dividend.
A
True
21
Q
What is required for an account being opened for a client who wishes to engage in short selling stock?
A
(1) Principal’s signature and (2) client’s signature (since the activity requires a margin account)
22
Q
Calculate SMA using the following balances: LMV $40,000, Debit $10,000 and Equity $30,000
A
Equity - 50% of the LMV = Excess Equity ($30,000 - $20,000 = $10,000)
23
Q
What must be done if a client is too ill to manage his own affairs?
A
Obtain a court appointment naming someone to manage the account
24
Q
May clients in TIC accounts have unequal interests?
A
Yes. Also, TIC accounts may have more than two account holders.
25
Where must SIPC membership be displayed?
In each branch and home office of the BD. Also, any retail communication must contain the SIPC logo.
26
A long margin account's minimum initial equity requirement is _____% of the purchase or $______ , whichever is less.
A long margin account's minimum initial equity requirement is 100% of the purchase or $2,000, whichever is less.
27
What is some of the important information to obtain when opening a new client’s account?
Name, address, age, occupation, SSN, citizenship, income, net worth, objectives, risk tolerance, investment experience
28
The industry minimum maintenance requirement for a short account is ____%.
The industry minimum maintenance requirement for a short account is 30%. (Equity must be at least 30% of SMV.)
29
List some of the risks associated with brokered CDs.
Call risk, interest rate risk, and limited liquidity
30
For a power of attorney to be effective, it must be signed by the ________ and accepted by _____________ of the firm.
For a power of attorney to be effective, it must be signed by the client and accepted by a principal of the firm.
31
What list must be checked to identify suspected terrorists and criminals?
OFAC List (Treasury Department's Office of Foreign Assets Control)
32
What is the margin requirement when buying options?
100% of the premium
33
What is a TOD account?
An account in one person’s name that allows a beneficiary to gain control upon the account holder’s death.
34
What three items must be specified on a not held order?
Action (buy/sell), Amount (quantity), and Asset (security)
35
How is the account affected if SMA is withdrawn?
Debit balance increases and equity decreases.
36
What regulation protects the non-public personal information of customers?
Regulation S-P
37
True or False: Only one person must provide information to open a joint account.
False. Each owner must provide information to open a joint account.
38
What items are acceptable as proof of identity under the Customer Identification Program (CIP)?
Passport or driver’s license (both have a picture)
39
Custodial accounts are opened under whose Social Security number?
The minor’s
40
What is required for an agent to open a joint account with a customer?
Written approval of the client and the BD and any sharing must be proportionate to each person's contribution.
41
What power of attorney remains in force despite the account owner becoming incompetent or incapacitated?
Durable power of attorney
42
What must be obtained for a firm to commingle the securities of two or more customers?
Written permission from each customer
43
Excess margin securities are those whose value exceeds _____% of the customer's debit balance.
Excess margin securities are those whose value exceeds 140% of the customer's debit balance.
44
What happens to the deceased’s portion in a joint account with tenants-in-common?
The deceased's portion goes to his estate for tax purposes.
45
The ______________ agreement must be signed before a firm may lend stock belonging to a client.
The loan consent agreement must be signed before a firm may lend stock belonging to a client.
46
Describe a wrap account.
An account that charges the client a single fee that covers transaction execution and account management
47
What is the benefit of ACATS?
It replaces a manual account transfer system with a fully automated and standardized one.
48
True or False: SIPC provides coverage for market losses.
False. SIPC protects against BD bankruptcy.
49
A principal of a member firm must approve discretionary orders __________.
A principal of a member firm must approve discretionary orders promptly.
50
A certificate of incumbency is invalid if it is older than ___ days when initially presented.
A certificate of incumbency is invalid if it is older than 60 days when initially presented.
51
What happens to a pre-existing power of attorney at the time of a client's death?
It becomes invalid
52
What type of mutual fund is often used as a safe harbor?
Money-market funds
53
If a client is unsure about a specific investment strategy, his funds should be parked in a _______________ fund.
If a client is unsure about a specific investment strategy, his funds should be parked in a money-market fund.
54
According to Reg T, what happens to a client's account if she fails to pay in a timely manner?
Her account will be frozen for 90 days.
55
An investor's strategy is __________ when effecting a short sale.
An investor's strategy is bearish when effecting a short sale (If stock falls, investors may buy back at a lower price).
56
Upon validation of a transfer, the transfer must be completed within ___ business days.
Upon validation of a transfer, the transfer must be completed within 3 business days.
57
Must the custodian in an UGMA account be a parent?
No. Any adult may be custodian.
58
17
| True or False: All corporate officers may effect transactions for the corporation.
False, only those named in the Corporate Resolution
59
Identify the acronym: SAR
Suspicious Activity Report
60
A margin account has Market Value of $20,000, Debit of $8,000, Equity of $12,000. What may the BD borrow from a bank?
$8,000, which is 100% of the debit balance.
61
How will the sale of securities from an account affect the account balances?
LMV and Debit decrease by the sales proceeds, Equity stays the same, and SMA increases by 50% of the sales proceeds.
62
True or False: ETFs are marginable and may be sold short.
True
63
The minimum equity requirement for the initial short sale in a margin account is $_______ .
The minimum equity requirement for the initial short sale in a margin account is $2,000.
64
Option positions due to expire in the next ______ business days will not be transferred with the rest of the account.
Option positions due to expire in the next seven business days will not be transferred with the rest of the account.
65
When buying securities in a restricted margin account, clients must deposit ___% of the trade within ____ business days.
When buying securities in a restricted margin account, clients must deposit 50% of the trade within four business days.
66
Who must review a change of address for a client of a producing branch manager?
An independent supervisor
67
An order to "buy 500 shares of Winchell Inc. at good price at some point today" is an example of a _________ order.
An order to "buy 500 shares of Winchell Inc. at good price at some point today" is an example of a not-held order.
68
What is a not held order?
An order giving agents discretion as to execution time/price. Clients must specify buy/sell, security, and quantity.
69
Not held orders may be placed by both ________ and _______________ customers.
Not held order may be placed by both retail and institutional customers.
70
At death, assets held in a minor's account become a part of her _______.
At death, assets held in a minor's account become a part of her estate.
71
Identify the acronym: SIPC
Securities Investor Protection Corporation
72
What is not pertinent when opening an account, a client’s educational or financial background?
Educational background
73
The current Reg T margin requirement is ____%.
The current Reg T margin requirement is 50%.
74
The _________ is responsible for taxes on income in a custodial account.
The minor is responsible for taxes on income in a custodial account.
75
What type of power of attorney is required for an individual to buy and sell securities in a client’s account?
Limited power of attorney
76
What will SIPC cover in a customer's margin account?
Only the customer's equity (securities clear of any outstanding loan)
77
Any amount of equity greater than 50% is called _______________.
Any amount of equity greater than 50% is called excess equity.
78
True or False: An individual who has been granted discretionary authorization is considered a co-owner of the account.
False. All account assets remain the sole property of the account owner.
79
True or False: Only BDs are required to provide privacy notices to their clients.
False. Investment companies, investment advisers, and banks also deliver privacy notices.
80
Under the Customer Protection Rule, which securities must be segregated from all other BD assets?
All fully-paid and excess margin securities belong to customers
81
If Mary has a cash account as well as an IRA account, what coverage will SIPC provide?
The cash account is one customer and the IRA (which is a trust) is a second customer. So, $500,000 for each customer.
82
How often must an updated copy of the privacy notice be provided to customers?
At least once during each 12-month cycle
83
What is the OFAC List?
The Office of Foreign Assets Control of the U.S. Treasury List; it identifies suspected terrorists and criminals
84
True or False: All discretionary orders must be pre-approved.
False. Discretionary orders are required to be reviewed and approved on the day the order is entered, not in advance.
85
Is SIPC part of the U.S. Government?
No. It is a non-profit entity funded by assessments on BD members.
86
For how long may a not held order be maintained?
A not held order is considered a day order.
87
Since the _______ is responsible for any tax liability, custodial accounts use the tax ID of the _______.
Since the minor is responsible for any tax liability, custodial accounts use the tax ID of the minor.
88
Explain a BD's obligations regarding its Customer Identification Procedures (CIP).
Under CIP, firms are required to obtain and verify certain customer information when opening accounts.
89
True or False: BDs may accept oral permission from clients to exercise discretion in their accounts.
False. The client's prior written authorization is required.
90
Define promptly as it relates to a principal's approval of discretionary orders.
Promptly means on the day of the trade, but not in advance.
91
When must the Reg S-P privacy notice be provided to a customer?
At the time of the account opening and annually thereafter
92
Does this order require prior discretionary authorization? "Buy 500 shares of DMB sometime today."
No, this is a not held order. The customer specified the action (buy), the amount (500 shares), and the asset (DMB).
93
If a client wishes to opt out and prevent a firm from sharing personal information, what opt-out methods are acceptable?
Calling a toll-free number and returning a postcard are reasonable methods.
94
Does this order require prior discretionary authorization? "Buy some ABC shares today if its price begins to fall."
Yes. This is NOT a not held order since the client did not specify the quantity of shares to be purchased.
95
What age must be attained for the minor to gain control over his account?
Age of majority
96
If a client serves in the military and does not have a residential or business street address, what may be used instead?
Military personnel may use an Army Post Office Box (APO) or Fleet Post Office Box (FPO)
97
If a client does not have a valid driver's license or passport, what may be used to verify identity?
Client financial statements or checking references/information with other institutions or consumer reporting agencies
98
When must an SAR be filed?
Within 30 days of the activity
99
Under Regulation T, does the payment date requirement apply to cash or margin accounts?
Payment is required within four business days for both (100% in a cash account, but 50% in a margin account).
100
True or False: Members may charge customers for collecting dividends and for the safekeeping of securities.
True, as long as the charges are reasonable and do not discriminate unfairly between customers.
101
True or False: Custodial accounts are solely carried in the name of the minor.
False. The account is in the custodian’s name for the benefit of the minor.
102
How is SIPC funded?
Through assessments on BDs that are SIPC members
103
What is required for a client's account to be identified by number instead of name?
The client must sign a statement attesting to the ownership of the account.
104
True or False: Customers are required to sign the loan consent agreement.
False, the loan consent agreement is optional.
105
When must the verification of a client's identity occur?
Within a reasonable period of time from the opening of the account
106
How is verification of the change of a client's address confirmed?
By sending notice to the client's old address
107
Whose Social Security number is listed on a custodial account?
The minor's
108
While away on vacation, Jerry wants his son to be able to pay bills and make investment decisions. What is required?
(1) A signed request from the client, and (2) full power of attorney (full POA is required due to the check writing privilege)
109
An account with equity below the Reg T requirement is called ____________.
An account with equity below the Reg. T requirement is called restricted.
110
Define Regulation T.
The percentage a customer must deposit when purchasing securities or selling short
111
How long must new issues be held before they may be used as collateral?
30 days
112
Does this order require prior discretionary authorization? "Sell 300 shares of XYZ today if it starts to rise"
No, this is a not held order.
113
Existing account: LMV $40,000, Debit $25,000, Equity $15,000. How is SMA affected by receiving a $5,000 cash dividend?
SMA would be credited with $5,000 (100% of the deposit).
114
RRs must examine what document to open any corporate account?
Corporate Resolution
115
What report is filed when financial transactions have no apparent business purpose?
A Suspicious Activity Report (SAR)
116
What document allows a BD to lend customer securities to someone wishing to sell them short?
Loan Consent Agreement
117
From which individuals may an RR borrow funds?
Friends, relatives, or business partners
118
Who may trade on behalf of someone who is incapacitated?
A person appointed as a conservator
119
What may a BD lend to a customer in a margin account?
The complement of the Reg T margin call. In other words, 50%.
120
True or False: Jim's joint account with his wife is considered a separate customer by SIPC.
True. E.g. Jim's cash and margin account are combined for coverage, but Jim's joint account with his spouse is separate.
121
If the owner of a discretionary account becomes incapacitated, what happens to the power of attorney?
The power of attorney is void and the appointment of a guardian/conservator would be required.
122
What is the formula for finding equity in a combined margin account?
(LMV + Credit Balance - Debit Balance - SMV)
123
Where may a firm display its SIPC membership?
On letterhead, business cards, websites, in retail communication, and on signs displayed in its offices
124
True or False: An account with a TOD designation avoids both estate taxes and the probate process.
False. TOD accounts avoid probate, but not estate taxes.
125
A client buys stock on margin and makes no cash deposit because he uses SMA. How are the account balances affected?
LMV and Debit both increase by the full purchase price; no change is made to equity.
126
When reviewing discretionary accounts for excessive trading, which factor should be reviewed first?
The client's investment objectives
127
For margin accounts, the maximum amount that a firm may borrow from the bank is _____% of the debit balance.
For margin accounts, the maximum amount that a firm may borrow from the bank is 100% of the debit balance.
128
What amount of fully paid securities must be deposited to meet a margin requirement?
Securities with a loan value equal to the margin call (in other words, two times the margin call)
129
Is margin permitted in a minor’s account?
No, securities must be fully paid.
130
Under the Customer Identification Program of the USA PATRIOT Act, what information MUST be obtained about a client?
Date of birth, name, address, and an ID number
131
What steps are taken if a customer dies?
Mark the account “deceased,” cancel open orders, and await instructions.
132
When do gifts become the property of the minor in a custodial account?
When gifted
133
True or False: A BD must disclose to its margin clients the amount of interest that will be charged.
False. Since the rate changes, BDs cannot determine the amount of interest. Instead, the rate of interest is disclosed.
134
The credit balance is made up of what two components?
Short sales proceeds plus the Reg. T requirement
135
Does SIPC protect separate customers or separate accounts?
Separate customers. A customer with both a cash and margin account with a BD would be covered once.
136
When a child reaches legal age, what action is taken in the custodial account?
The custodian must transfer the assets to the owner.
137
True or False: A BD managing a discretionary account is considered to be acting as an investment adviser (IA).
True
138
True or False: All discretionary orders must be approved verbally by the client by the end of the day.
False
139
If an option is purchased, Regulation T requires payment to be made within ____ business days.
If an option is purchased, Regulation T requires payment to be made within four business days.
140
Customer account information must be updated every ____ months.
Customer account information must be updated every 36 months.
141
Does SIPC insure client assets?
No. SIPC protects against firm bankruptcy.
142
True or False: Market declines will reduce SMA.
False. The only way to lose SMA is to use SMA.
143
What is required for an investment adviser to place a transaction for its client?
The client would be required to sign a third-party trading authorization.
144
A ___________________ is required to open an account for a partnership.
A Partnership Agreement is required to open an account for a partnership
145
For a Series 7 representative to offer wrap accounts, what other registration must she hold?
Series 65 or 66
146
What stocks does the FRB deem to be marginable?
Those stocks listed on major exchanges and on Nasdaq
147
Customers are given ____ business days after settlement date to pay for their portion of the trade.
Customers are given two business days after settlement date to pay for their portion of the trade. (S+2 or T+4)
148
Hypothecation is synonymous with what term?
Pledge
149
How is buying power calculated?
SMA divided by Reg T of 50% (just remember SMA x 2)
150
A change of address notification must be sent within ____ days.
A change of address notification must be sent within 30 days.
151
True or False: SIPC provides coverage for both commodities and futures accounts.
False
152
What happens to a client's brokerage account if she is continually late in paying?
The account may be frozen for 90 days
153
If a client grants discretion to a third party, the ___________ of the person granted discretion must be obtained.
If a client grants discretion to a third party, the signature of the person who has been granted discretion must be obtained.
154
The _________________________ regulates margin requirements.
The Federal Reserve Board (FRB) regulates margin requirements.
155
What is the Reg T margin requirement for short sales?
50%
156
Under the Customer Identification Program, may accounts be opened for clients refusing to provide required information?
No
157
____________ governs the extension of credit by BDs.
Regulation T governs the extension of credit by BDs.
158
What is TOD as it relates to a customer account?
Transfer on Death. TOD allows assets to transfer to a named beneficiary at owner's death.
159
May a custodian make speculative investments in a minor’s account?
Yes, provided they are suitable based on the objectives
160
Jim calls his RR to request that his account-related mail be held while he is on vacation. What is the correct response?
Until a written request is received, no action may be taken. Written, not verbal, instructions are required.
161
SIPC provides coverage of $_________ of which no more than $_________ can be cash.
SIPC provides coverage of $500,000 of which no more than $250,000 can be cash.
162
Not held orders are considered to be in effect for _____ trading day(s).
Not held orders are considered to be in effect for one trading day.
163
What happens to the power of attorney to exercise discretion if the client dies?
The client's death invalidates the power of attorney.
164
True or False: An account with a TOD designation is considered a joint account.
False. TOD accounts allow for the transfer of assets to a named beneficiary at the account owner's death.
165
For purposes of verifying client identity, may firms accept personal references provided by the client?
No, verification from an independent source is required.
166
What is the proper registration for a custodial account?
Adult X, C/F (custodian for) Child X, under the UGMA of the State of XX
167
Client information is sent to the client within ____ days of the account opening and updated at least every ____ months.
Client information is sent to the client within 30 days of the account opening and updated at least every 36 months.
168
Only ______ custodian is allowed per minor’s account.
Only one custodian is allowed per minor’s account.
169
May an RR personally lend to, or borrow from, a client?
No. These actions are typically violations of FINRA rules.
170
The maximum potential loss when selling short is ____________.
The maximum potential loss when selling short is unlimited.
171
What does selling short mean?
Selling securities that are not owned, but are borrowed from a BD
172
Custodians have a ____________ duty to do what is best for the minor.
Custodians have a fiduciary duty to do what is best for the minor.
173
In the process of opening a new account, when must an RR obtain customer information?
Prior to entering the first order
174
The _____________________ has the authority to regulate margin requirements.
The Federal Reserve Board (FRB) has the authority to regulate margin requirements.
175
Both the ____________ and the ____________ are required for a corporation to open an options or margin account.
Both the Corporate Resolution and Corporate Charter are required for a corporation to open an options or margin account.
176
What may an RR do with full discretion, but not with limited discretion?
Withdraw money from the account
177
What happens to the deceased’s portion in a joint account with right of survivorship?
Her portion passes to the survivor.
178
To collateralize a loan, the maximum amount of stock that a broker may send to the bank is _____% of the customer debit.
To collateralize a loan, the maximum amount of stock that a broker may send to the bank is 140% of the customer debit.
179
Is an UGMA account considered a joint account?
No. The assets are the property of the child.
180
Is discretionary authorization required to enter a not held order?
No, since discretion is limited to time and/or price for not held orders.
181
Are mutual funds considered marginable securities?
No. Investors must pay 100% of the purchase price.
182
True or False: Using a P.O. Box as an address is not acceptable to open an account.
True. An actual address is required; however, mail may be sent to a P.O. Box.
183
True or False: A not held order may be executed at any point during the course of a week.
False. Not held order may only be executed on the day the order was entered.
184
When is a CTR required to be filed?
Within 15 days of the activity
185
The ___________________ must sign the account form.
The supervising principal must sign the account form (clients are not required to sign).
186
For a joint account, how many account numbers and SSNs are used for tax reporting?
One
187
To meet a $20,000 Reg. T call, a customer could deposit cash of $________ or fully paid securities of $________.
To meet a $20,000 Reg. T call, a customer could deposit cash of $20,000 or fully paid securities of $40,000.
188
True or False: Restricted accounts must be remedied immediately by depositing the appropriate dollar amount.
False. Restricted accounts do not require immediate response.
189
Identify the acronym: CTR
Currency Transaction Report
190
Securities that are acceptable as collateral have a loan value that equals ____%.
Securities that are acceptable as collateral have a loan value that equals 50%.
191
The industry minimum maintenance requirement for a long account is ____%.
The industry minimum maintenance requirement for a long account is 25%. (Equity must be at least 25% of LMV.)
192
Who notifies customers of BD bankruptcy?
The trustee handling the liquidation
193
What type of order gives discretion as to price and time of execution?
Not Held
194
True or False: Investment company shares may be purchased on margin.
False. While mutual fund shares may not be purchased on margin, the shares have loan value if owned for 30 days.
195
What is SIPC?
Securities Investor Protection Corporation. SIPC protects separate customers in the event of BD bankruptcy.
196
How long can a short stock position be maintained?
Unlimited, provided the account maintains the minimum required equity.
197
Customers become ___________________ if their cash or securities positions exceed SIPC coverage.
Customers become general creditors if their cash or securities positions exceed SIPC coverage.
198
True or False: Clients need not sign the account form for a cash account.
True, but signature would be required for an option or a margin account.
199
May new issues (e.g., IPOs or mutual fund shares) be purchased on margin?
No
200
If a BD goes bankrupt, what happens to securities registered in the customer’s name?
They are returned to the customer without regard to SIPC limitations.
201
True or False: Principals must approve discretionary orders prior to entry.
False. The orders must be approved promptly afterward.
202
The appointment of guardian/conservator and certificate of incumbency must not be older than ____ days.
The appointment of guardian/conservator and certificate of incumbency must not be older than 60 days.
203
What program must be established by BDs to verify the identity of each customer opening an account?
Customer Identification Program (CIP)
204
In a margin account, customers pay interest on the ________ balance.
In a margin account, customers pay interest on the debit balance.
205
Does this order require prior discretionary authorization? "Buy 300 shares of DMB this week"
Yes, since it is NOT a not held order. Not held orders are only good for a trading day, and this order is for the week.
206
If a client's equity falls below 25%, the maintenance call must be met __________.
If a client's equity falls below 25%, the maintenance call must be met promptly.
207
When must a margin disclosure document be provided to a client?
At the time the account is opened
208
If a client refuses to provide certain information, may the account still be opened?
Yes, although name and address are required.
209
A margin account with 40% equity would be considered a ___________ account.
A margin account with 40% equity would be considered a restricted account.
210
What is needed to exercise discretion over a client’s account?
Written power of attorney
211
May a client use a numbered account instead of her name?
Yes, provided the client's identity is known to the firm.
212
Regulation S-P requires clients be provided with a ______________ detailing how BDs handle personal client information.
Regulation S-P requires clients be provided with a Privacy Notice detailing how BDs handle personal client information.
213
True or False: Gifts made to minors are irrevocable.
True
214
Clients must be notified of any changes in the terms of a margin account ____ days before they become effective.
Clients must be notified of any changes in the terms of a margin account 30 days before they become effective.
215
How do nonmanaged, fee-based accounts differ from wrap accounts?
A fee is charged to cover transaction costs (often a percentage of assets), but no management is performed.
216
_____________________________ protects customers from BD bankruptcy.
Securities Investor Protection Corporation (SIPC) protects customers from BD bankruptcy.
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217 of 217 May a wife enter trades in a husband’s account?
Yes, with written third-party authorization.
