Practice Quiz

FINRA Series 6

Category - Series 6

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Ms. Newbie’s client, Mr. Nomad, has decided that he wants to go on an extended backpack trip through the Amazon. Since he’ll be out of touch, he has given a friend of his limited power attorney to act on his behalf. Based on this, Mr. Nomad’s friend can:

I. present Ms. Newbie with an order to purchase securities on Mr. Nomad’s behalf.
II. present Ms. Newbie with an order to sell securities on Mr. Nomad’s behalf.
III. request a check be issued to him so that he can send Mr. Nomad some money.
  1. I only
  2. I and II only
  3. I, II, and III
  4. none of the above. Only a relative can hold a power of attorney to engage in financial transactions for the grantor.
Explanation
Answer: B - Mr. Nomad’s friend can engage in the activities described in Selections I and II only. A limited power of attorney gives Mr. Nomad’s friend the authority to buy and sell securities on Mr. Nomad’s behalf, but not to make any cash withdrawals. He would need a full power of attorney to be able to do so.
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