SIE Exam Question 215: Answer and Explanation

Question: 215

Which of the following actions regarding stock PIX would be considered a violation for any registered representative?

• A. Rushing a customer to purchase stock PIX specifically to qualify prior to the ex-dividend date
• B. Making a customer recommendation to purchase stock PIX simply to benefit from a pending dividend payment
• C. Recommending a purchase of stock PIX to a customer by highlighting the pending dividend payment as an incentive while neglecting to educate him or her on the stock’s fundamentals, appropriateness, risks, and rewards
• D. All of the above are violations.

Correct Answer: D

Explanation:

A registered representative would be committing a violation by rushing a customer to make a purchase solely to meet the ex-dividend date, recommending a purchase simply to benefit from a pending dividend, or promoting a stock by highlighting the benefit of the pending dividend while neglecting to educate him or her as to the fundamentals or appropriateness this stock may have as an investment.