Microsoft PL-200 Q&A - in .pdf

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  • Exam Code: PL-200
  • Exam Name: Microsoft Power Platform Functional Consultant
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NEW QUESTION: 1
Ms. Mix always assures her clients that she will be calling them with quarterly recommendations for
rebalancing their portfolios if there are any changes that she feels are appropriate. This has worked out
well for her pocketbook since she has always been able to tweak each of her clients' investment portfolios
a little each quarter by recommending that they redeem their shares in one fund that hasn't performed as
well in the last quarter and use the proceeds to invest in another that has. Her clients feel cared for since
she is in such regular contact with them. Is Ms. Mix violating any securities regulations with this policy of
hers?
A. Yes. Any recommendation that benefits a registered representative is deemed to be in violation of
FINRA's rules regarding fair dealing.
B. Yes. Mutual funds are not designed to be short-term investments.
C. No. Ms. Mix is merely providing good service to her customers.
D. It depends. There is no violation as long as her clients' portfolios are increasing in value.
Answer: B
Explanation:
Yes. Mutual funds are not designed to be short-term investments, and Ms. Mix should not be
calling her customers quarterly with rebalancing recommendations. Even if one fund has outperformed
another in a particular quarter, there is no guarantee that this will happen in the next quarter. This violation
falls under FINRA's rules regarding the trading of mutual fund shares, even if the trading results in an
increase in the clients' portfolio values. Ms. Mix can certainly call her clients each quarter to see if they
have any questions or concerns or to say hello; her clients will still feel cared for. It is not a violation for a
registered representative to make a recommendation that benefits her as well as her clients as long as the
recommendation is made to benefit the client first and foremost.

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