Suitability Rules
A registered representative makes 50 trades in a customer's account over one month, each individually suitable. However, the combined effect generates excessive commissions relative to the account size. This violates which suitability obligation?
Quantitative suitability addresses the total number of transactions, even if each is individually suitable. Excessive trading (churning) violates this obligation because the cumulative trading activity is not in the cust
Complete Analysis & Legal Rationale
Quantitative suitability addresses the total number of transactions, even if each is individually suitable. Excessive trading (churning) violates this obligation because the cumulative trading activity is not in the customer's best interest.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.