SIE Exam Question 227: Answer and Explanation

Question: 227

The term 'disclaimer' is most often associated with

• A. The fact that unregistered securities are riskier than registered ones
• B. The fact that the government cannot guarantee the accuracy of the information in a prospectus
• C. The fact that no agent can guarantee a customer against loss
• D. None of the above

Correct Answer: B

Explanation:

B: The SEC reviews the information in a registration statement, it does not approve or disapprove of the information, nor does it guarantee the accuracy of the information disclosures. Therefore no sales agent can say to a prospect that these are 'government approved' securities.