Finra
A broker-dealer's advertisement states: "Our fund has returned 12% annually for the past 5 years and will continue this performance." This advertisement is:
Stating that past performance "will continue" is a guarantee of future performance, which is prohibited. Communications must not predict or imply that past performance will continue. While the historical 12% return is fa
Complete Analysis & Legal Rationale
Stating that past performance "will continue" is a guarantee of future performance, which is prohibited. Communications must not predict or imply that past performance will continue. While the historical 12% return is factual, promising its continuation is misleading and violates FINRA rules.
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 concept in the explanation.
Does not match the governing concept in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing concept in the explanation.
Official Standard: Content and approval standards for member communications (verify current text).
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.