SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 9: Answer and Explanation

Question: 9

A discretionary account has which of the following features?

• A. Borrowed money is used to buy a security.
• B. A borrowed security is sold.
• C. A characteristic of an order other than price and timing is selected by the representative.
• D. The counterparty of an order is selected by the representative.

Correct Answer: C

Explanation:

C: Choice C reflects the representative's prerogative to choose an order's characteristic other than price and timing. Choices A and B occur in a margin account. Choice D is not a typical occurrence in any account.