Laws & RegulationsQuestion 8 of 100
An agent tells a customer, 'This stock is guaranteed to go up because the state Administrator approved the registration.' This statement is:
a.Accurate, because registration signifies approval
b.Permissible if made only to accredited investors
c.A lawful description of registration by qualification
d.A prohibited misrepresentation of the effect of registration
Explanation
Registration with the Administrator never means the state approved the merits or guaranteed the security. Implying that registration ensures profit is a material misrepresentation and a prohibited practice. Agents must not misstate the effect of registration.
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