SIE Exam Question 378: Answer and Explanation

Question: 378

When a customer places a purchase order for an NYSE stock and the trade is reported at a price which is different than the actual transaction price,

• A. the client pays the price initially reported
• B. the client is given the better price
• C. the trade goes through at a price approved by FINRA
• D. the client pays the price at which the trade was executed

Correct Answer: D

Explanation:

D: Occasionally, a client will be told that a trade was done at a transaction price which turns out to be incorrect. This can happen for a number of reasons, usually clerical, not intentional. Federal law and FINRA rules state clearly that the client will be told about the erroneous report, and the transaction will be done at the actual price at which it took place, not at the erroneous price. Since every transaction is a legal contract, the actual price at which the trade was executed is the legally binding price.