Practice Quiz

Financial Planner

Category - Professional Conduct and Regulation

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If a national bank has investment discretion over funds held for investment, what can the bank NOT do with those funds?
  1. Keep the funds uninvested for an unspecified length of time
  2. Deposit the funds in a savings account in the same bank
  3. Deposit the funds in a savings account of an affiliated deposit institution
  4. Draw interest on any uninvested funds kept in a bank account
Explanation
Answer: A - When a national bank has fiduciary responsibilities over funds for which that bank has investment discretion, the bank must invest those funds. The funds can be deposited into an account at the bank or an affiliated deposit institution, but must invest or distribute the appropriate funds within a reasonable period of time.
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