Chapter 1 : Standards of Conduct & Ethics

Question 1

Your 3 obligations as an RR?

Answer 1

1. Understand your client’s situation before making investment decisions.
2. Understand the products you recommend.
3. Act honestly, in good faith, and in a professional manner.

Question 2

The ethical requirement to understand each clients’ situation

Answer 2

The Know Your Client rule

Question 3

The manner in which you gather client info is referred to as ___________.

Answer 3

The discovery process

Question 4

Before recommending the purchase of any investment product to a client, you must first understand how it is constructed and how it is likely to perform in various market conditions. This obligation is often referred to as the

Answer 4

Know Your Product obligation

Question 5

The requirement to provide advice to clients fully, honestly, in good faith, and with the proper skills and knowledge is referred to as

Answer 5

Duty of Care

Question 6

_______________ exists in circumstances where one person must place trust in the honest intentions of another person who holds greater authority or expertise.

Answer 6

Fiduciary Duty

Question 7

Generally, RRs who provide advice are held to a _________.

Answer 7

Duty of Care

Question 8

The securities industry has no formal code of __________.

Answer 8

Ethics

Question 9

Industry rules and regulations are know as the ____________, and ethics are know as ____________

Answer 9

“Letter of the Law”

“Spirit of the Law”

Question 10

3. Act in a ________, ________, and ________ manner in all dealings with clients, employers, colleagues, and the public.

Answer 10

honest, fair, and trustworthy