Exercise
Circle TRUE or FALSE
- 1. TRUE or FALSE. Records relating to the verification of identification must be kept at least three years.
- 2. TRUE or FALSE. Full trading authority allows a third party to trade in an account and withdraw funds from the account.
- 3. TRUE or FALSE. A customer’s age is required information to complete a suitability questionnaire.
- 4. TRUE or FALSE. After a married couple signs a joint party agreement upon opening a joint account, both parties are able to make transactions in the account without permission from the other.
- 5. TRUE or FALSE. A custodian is are not allowed to withdraw funds from an UGMA account unless she spends the funds on the minor or reimburses herself for money spent on the minor.
Choose the best answer
- 6. Ellen called her broker from her nuclear bunker on a secure line and is not too crazy about giving out information, but would like to open an account. Which of the following is not required to open a new account?
- A. Full name
- B. Date of birth
- C. Social Security number or tax ID
- D. The customer’s signature
- 7. John decides to donate $12,000 worth of stock to his 10-year-old nephew Ralph’s UGMA account. As Ralph gets older, however, Ralph begins to exhibit increasingly irresponsible behavior. John goes to his broker and asks him to remove the stock from Ralph’s custodial account. His broker tells him that:
- A. This is no problem.
- B. The gift of stock cannot be reversed.
- C. Only stock in the amount of the original gift can be removed, and all growth must stay in the account.
- D. The stock can be removed with a court order.
- 8. Josh has decided to open an UGMA account for his eight-year-old daughter. He hopes that when she turns 18 she will use the earnings to pay for college. He has decided that he will be the custodian for the account. Which of the following action