Exercise
Answer True or False.
1. True or false. It is not possible for churning to occur in a discretionary account.
2. True or false. Agents generally cannot borrow money from or loan money to customers.
3. True or false. For a margin account with a broker-dealer, a written agreement must be in place before any trades are made.
4. True or false. An investment adviser would be allowed to enter into a performance-based arrangement if the client had a net worth of $2.5 million and a primary residence valued at $600,000.
5. True or false. An investment adviser representative can only reveal confidential client information with the client’s consent.
Answers
1. False. Churning, or excessive tradi