Which One of the Following Is a True Statement Regarding

question 89

Multiple Choice

Which one of the following is a true statement regarding account executives?

• A)They are generally not liable for client losses that result from their recommendations.
• B)It is wise to allow an account executive to make investment decisions without the client's approval.
• C)An account executive cannot buy and sell securities for clients and help them develop your investment program.
• D)An account executive is not licensed to buy or sell securities for clients.
• E)The arbitration clause allows clients to sue the brokerage firm that an account executive represents.

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Definitions:

Fictitious-Payee Rule

A principle in commercial law that a bank is not liable for fraudulent endorsement payments if the drawer intended the payee to be fictitious.

Refund

The process of returning funds to a purchaser in response to a product return, cancellation, or dissatisfaction with services provided.

Endorser

A person who signs their name on a document, often a check, to indicate their approval or to transfer ownership to another party.

Drawer

In a financial context, the person who writes or issues a check or draft instructing a bank to pay a specified sum of money to a designated party.