Series 7 Exam Question 326: Answer and Explanation

Question: 326

Prior to opening a day-trading account for a customer, a member shall make a reasonable effort to determine certain information about the customer, including

• A. their investment objectives
• B. their marital status
• C. their trading experience
• D. All of the above

Correct Answer: D

Explanation:

D. Day-trading accounts are obviously very risky. So, customers who want to open a day-trading account must receive a risk disclosure statement and the member firm shall make a reasonable effort to make sure that it is an appropriate strategy for the customer. To help determine that, the firm should determine the customer's investment objectives, investment experience, investment knowledge, financial situation, tax status, employment status, marital status, number of dependents, and age.