Series 7 Exam Question 181: Answer and Explanation

Question: 181

If one of your clients wants to order municipal securities that you believe to be unsuitable for their investment objectives, what should you do?

• A. Execute the order as long as you mark the order ticket as "unsolicited."
• B. You must refuse the order unless the client changes their investment objectives.
• C. You must obtain the permission of the firm's compliance officer before executing the order.
• D. You may only execute the order with prior permission of a principal of the firm.

Correct Answer: A

Explanation:

A. If a registered representative believes that a customer is making an unsuitable trade, the representative may enter the order but must mark the order ticket "unsolicited." In this question, the client is making a trade that you believe is unsuitable for them, but you can still execute the trade as long as you mark the order ticket as "unsolicited," which will protect you and make your client happy.