Series 7 Exam Question 310: Answer and Explanation

Question: 310

If a customer, Jessica James, gives limited power of attorney to her registered representative, which of the following is TRUE?

• A. The registered representative still needs verbal authorization from Jessica for each trade.
• B. Jessica must sign a power-of-attorney document.
• C. The registered representative must sign a power-of-attorney document.
• D. Jessica must initial each order before it is entered.

Correct Answer: B

Explanation:

B. The correct answer is Choice (B) because when Jessica grants her registered representative a limited power of attorney, she is the one who must sign the document. Although a principal must approve before the registered representative exercises their discretionary authority, the registered representative does not have to sign the document, and Jessica's approval of each order is not required.