Practice Quiz

FINRA Series 7

Category - Series 7

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Which of the following are considered to be discretionary orders under the FINRA Rules of Fair Practice?
  1. a customer instructs her registered representative to purchase stock in XYZ whenever the representative deems the price to be right
  2. a customer instructs her registered representative to sell 300 shares of ABC that is long in her account whenever the representative thinks the time and price are appropriate
  3. a customer gives a member firm a check for $25,000 and instructs the firm to purchase bank stocks and insurance company stocks when the prices appear to be favorable
  4. both A and C
Explanation
Answer: D - both A and C. Choice A is discretionary because the customer did not specify a quantity to purchase. Choice B only provides discretion about timing and thus is not discretionary. Choice C is clearly discretionary.
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