Under the Uniform Securities Act (USA), which of the following statements would be disallowed?
A.
The government of the U.S. guarantees a 3% interest rate, to be paid semiannually, on a new 5-year Treasury note.
B.
A sales representative of GetErDone Broker-Dealers guarantees that a client can expect an average annual rate of return of 2% on a mutual fund investment the sales representative is selling, pointing to the fact that the fund has returned an average annual rate of return of 6% over the past ten years.
C.
An insurance company guarantees a fixed payment of $300 a month for life on an annuity it is selling.
D.
Neither the statements in Selections B or C would be allowed under the guidelines of the Uniform Securities Act.
Suggested Answer:B🗳️
A sales representative (aka an agent) of a broker-dealer may not make any guarantees. Only three entities are allowed to make guarantees under the Act: Parent companies, which may guarantee the securities of one of its subsidiaries, the U.S. government, and insurance companies.
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