Chapter 4 Flashcards
True or False: Clients need not sign the account form for a cash account.
True; required for margin or option account
True or False: Only one person must provide information to open a joint account.
False
Who may enter orders in a joint account?
Any owner on the account
For a joint account, how many account numbers and SSNs are used for tax reporting?
one
What is a TOD account?
Transfer on Death; An account in one person’s name that allows a beneficiary to gain control upon the account holder’s death.
True or False: Money may be withdrawn from a joint account in one owner’s name.
False; has to have both names on it
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.
What happens to the deceased’s portion in a joint account with right of survivorship?
Her portion passes to the survivor.
Only ______ custodian is allowed per minor’s account.
one
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.
The _________ is responsible for taxes on income in a custodial account.
The minor is responsible for taxes on income in a custodial account.
When do gifts become the property of the minor in a custodial account?
When gifted
True or False: Gifts made to minors are irrevocable.
True
Is margin permitted in a minor’s account?
No
Custodians have a ____________ duty to do what is best for the minor.
fiduciary
May a custodian make speculative investments in a minor’s account?
Yes, provided they are suitable based on objectives
What age must be attained for the minor to gain control over his account?
Age of majority
RRs must examine what document to open any corporate account?
Corporate Resolution
True or False: All corporate officers may effect transactions for the corporation.
False, only those named in the Corporate Resolution
Both the ____________ and the ____________ are required for a corporation to open an options or margin account.
Corporate Resolution AND Corporate Charter
What is needed to exercise discretion over a client’s account?
Written Power of Attorney
Is discretionary authorization required to enter a not held order?
No since note held orders only give RR discretion on to time and price.
What three items must be specified on a not held order?
Action (buy/sell), Amount (quantity), and Asset (security)