Practice Quiz

FINRA Series 7

Category - Series 7

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What is the importance of the “at risk” rule?
  1. it limits deductions to the amount at risk
  2. it limits liability to the amount at risk
  3. deductions for interest may not exceed investment income
  4. it prevents carry forward of disallowed interest deductions
Explanation
Answer: A - it limits deductions to the amount at risk. Deductions may not exceed contributed capital.
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