CFA Live & Online Auction Procedures 2

Question 1

When a firearm lot fails to meet its reserve price at a live auction, what is the standard procedure?

Accepted Answer

The lot is passed and may be relisted or sold privately

Answer

A lot that does not meet its reserve price is 'passed' and the consignor may relist it, negotiate privately, or withdraw it.

Question 2

In online firearm auctions, what document must the winning bidder typically provide to the FFL transfer dealer before the gun is shipped?

Accepted Answer

A copy of a valid government-issued photo ID

Answer

The FFL dealer receiving the firearm usually requires a copy of a government-issued photo ID to initiate the transfer paperwork.

Question 3

What is the term for the incremental amount by which bids must increase during an auction?

Accepted Answer

Bid increment

Answer

A bid increment is the minimum amount a new bid must exceed the previous bid, set by the auction house.

Question 4

An appraiser notices a consigned rifle has a mismatched serial number on the bolt. What is the MOST appropriate action before the auction?

Accepted Answer

Flag it for legal review and notify the auction house immediately

Answer

A mismatched serial number may indicate an illegal alteration or theft; the appraiser must flag it for legal review before the lot proceeds.

Question 5

What is 'absentee bidding' in the context of a live firearm auction?

Accepted Answer

A bid submitted in advance authorizing the auctioneer to bid up to a set maximum on the bidder's behalf

Answer

Absentee bids are left-bid instructions that allow the auctioneer to execute bids up to a maximum amount for buyers who cannot attend in person.

CFA Practice Test