Series 7 Exam Question 272: Answer and Explanation

Question: 272

According to MSRB rules, a customer confirmation must include

• A. the markup or markdown
• B. the location of the indenture
• C. the maturity date
• D. whether the trade was done on an agency or dealer basis

Correct Answer: D

Explanation:

D. The Series 7 examiners may try to trip you up by throwing in an irrelevant answer choice (like the date of maturity) to find out whether you know your MSRB (municipal securities rulemaking board) rules. MSRB rules require that confirmations include whether the trade was executed on a principal (dealer) or agency basis. The amount of the dealer's markup or markdown on a principal trade does not have to be disclosed, but the commission on an agency trade does need to be disclosed.