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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. A winning bidder at an online firearm auction lives in a state where the purchased firearm type is prohibited. What happens?

    Answer: The sale is voided and the firearm cannot be transferred to that buyer

    If state law prohibits the firearm type, the FFL dealer cannot legally complete the transfer, and the transaction must be voided.

  2. What auction term describes the practice of artificially inflating bids using house confederates?

    Answer: Shill bidding

    Shill bidding involves confederates placing fictitious bids to drive up the price, which is fraudulent and illegal in most jurisdictions.

  3. When cataloging a historic military firearm for auction, which detail is MOST important for maximizing realized value?

    Answer: Documented provenance linking the firearm to a specific military unit or historical event

    Documented provenance, such as unit markings, capture papers, or military records, can dramatically increase a historic military firearm's auction value.

  4. What is the role of a 'ringman' or 'bid spotter' during a live firearm auction?

    Answer: To identify and relay floor bids to the auctioneer

    A ringman works the floor to spot bidder signals and relay them to the auctioneer, ensuring no bids are missed in a large crowd.

  5. How does the 'buy-it-now' option affect the auction process when listed for an online firearm lot?

    Answer: A buyer can purchase the lot immediately at a fixed price before the auction closes

    A buy-it-now price allows any registered buyer to purchase the lot outright at a predetermined price, ending the auction immediately.

  6. Which NFA item requires a $200 tax stamp for each transfer at auction?

    Answer: Short-barreled rifles, suppressors, and machine guns

    NFA-regulated items including suppressors, short-barreled rifles, short-barreled shotguns, and machine guns require a $200 transfer tax and ATF Form 4 or 4473.

  7. An auction house offers a 'guaranteed reserve' on a consigned firearm. What does this mean?

    Answer: The auction house guarantees to pay the seller a minimum amount regardless of the sale outcome

    A guaranteed reserve means the auction house has agreed to pay the consignor a minimum floor price even if the lot sells below that amount or fails to sell.