Question

A broker-dealer advertises on a radio program that is broadcast from a bank. Which of the following would be prohibited by the Administrator?

a.Mentioning that the broker-dealer that sponsored this show is affiliated with the bank
b.Mentioning the advantages of investing in mutual funds without sending a prospectus
c.Omitting the name of the broker-dealer in any 30-second ads during the show
d.Omitting the name of the bank during any 30-second ads during the show

Answer 1

The correct answer is a.Mentioning that the broker-dealer that sponsored this show is affiliated with the bank.

Step-by-step explanation:

The correct answer is a.Mentioning that the broker-dealer that sponsored this show is affiliated with the bank.

The reason this would be prohibited by the Administrator is because it is important to disclose any affiliations between the broker-dealer and the bank to ensure transparency and avoid any conflicts of interest.

By omitting this information, the broker-dealer would be misleading potential investors and violating regulations.