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Live & Online Auction Procedures Flashcards

7 cards from real CFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Live & Online Auction Procedures flashcards as text

  1. Under federal law, which class of firearms CANNOT be transferred to a private buyer through an online auction without additional NFA paperwork?

    Answer: Machine guns manufactured after May 19, 1986

    The Hughes Amendment of 1986 prohibits civilian transfer of machine guns manufactured after May 19, 1986, regardless of auction format.

  2. What does the term 'hammer price' refer to in auction terminology?

    Answer: The final winning bid amount at the moment the auctioneer's gavel falls

    The hammer price is the amount of the winning bid at the moment the auctioneer signals the sale, before any additional fees are added.

  3. An online auction platform sells a handgun to a winning bidder in a different state. To whom must the gun be shipped?

    Answer: A federally licensed firearms dealer (FFL) in the buyer's state

    Federal law requires interstate handgun transfers to go through an FFL dealer in the buyer's state, who conducts the background check.

  4. What is a 'soft close' feature in online firearm auctions?

    Answer: Automatic extension of the auction end time when a bid is placed in the final minutes

    Soft close extends the auction deadline by a set period each time a last-minute bid arrives, preventing bid sniping and ensuring fair competition.

  5. Which scenario would most likely cause an auction house to withdraw a firearm lot before the sale?

    Answer: Discovery that the serial number appears on a stolen firearms database

    A firearm confirmed as stolen must be withdrawn and the matter reported to law enforcement; proceeding with the sale could constitute criminal liability.

  6. In a CFA context, what does the term 'lot estimate' represent?

    Answer: The appraiser's pre-auction projected selling range based on market data

    A lot estimate is the appraiser's or specialist's opinion of the range within which the lot is likely to sell, based on comparable sales and condition.

  7. What is the primary purpose of requiring bidder registration before a firearm auction?

    Answer: To verify eligibility and establish accountability for the buyer's identity

    Bidder registration collects identity and contact information to ensure accountability and support background check compliance for firearm transfers.