Marketing & Business Development Flashcards

The best description of futures margin in marketing materials is:

Answer: A performance bond or good-faith deposit

Futures margin is a good-faith deposit securing performance, not a down payment or loan.

A firm's mass email to prospects must, under CAN-SPAM, include:

Answer: A working opt-out mechanism honored within 10 business days

CAN-SPAM requires a clear opt-out that the sender honors within 10 business days.

A prospect asks not to be called again by the firm. The firm should:

Answer: Add them to its internal do-not-call list and honor it

Company-specific do-not-call requests must be recorded and honored.

Under NFA rules, can a firm require a retail customer to sign a pre-dispute arbitration agreement as a condition of opening an account?

Answer: No, it cannot be a condition for opening the account

NFA Rule 2-5 prohibits making a pre-dispute arbitration clause a condition for retail customers.

An advertisement for a trading program shows only the best three months. This is likely:

Answer: Misleading because it presents an unbalanced picture

Selective performance presentation can be deceptive and fails the balance requirement.

A farmer calls to ask about hedging. Which statement is most appropriate?

Answer: Hedging can reduce price risk but still involves costs and basis risk

Hedging offsets price exposure but doesn't remove basis risk, margin needs, or costs.

Which statement is a required balance in advertising a futures product's benefits?

Answer: Give risk of loss comparable prominence to profit potential

Promotions must treat risk and reward fairly, giving risk disclosure comparable prominence.