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Excessive Trading Drill

Dashboard > Client Investment Recommendations and Strategies > Excessive Trading > Excessive Trading Drill

1.

A customer has a power of attorney with the broker, but it has expired. The customer calls in an order and tells the broker to buy an amount of IBM that he thinks is appropriate. The broker:
- (A)cannot accept the order
- (B)can place the order, but only for up to 100 shares
- (C)can place the order, provided a principal of the broker-dealer signs off on the order
- (D)can accept the order and purchase the number of shares that the broker deems appropriate

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2.

A customer has a valid power of attorney and has opened a discretionary account. If the customer calls in with an order, the broker:
- (A)must follow the instructions
- (B)can ignore it, since it is for a discretionary account
- (C)must follow the instructions, but only after other trades involving the broker's use of discretion
- (D)must ignore it, since it is for a discretionary account