Question of the Week

Mrs Jaxsonheim is considered one of StrateShooter National Bank's best and most financially stable customers. She approaches the bank President, also a friend, at a Chamber of Commerce event about a cash loan. Under the Uniform Securities Act, is the bank allowed to loan cash or securities to this customer?

a) Possibly, if the loan is in cash and not in securities.
b) Maybe, because Mrs Jaxsonheim is financially solvent and will repay the loan.
c) Yes, if the bank is in the lending business.
d) No, it is a conflict of interest because Mrs Jaxsonheim and the president are friends.


The correct answer is c.

Under the Uniform Securities Act, it is not considered ethical to lend cash or securities to a customer. However, it is considered permissible if the lender is a financial institution that is chartered to transact loans. Likewise, it is also considered unethical for an agent to take client funds for personal use.

Financial Professionals
  1. the general ledger is the record of a company's entire financial transaction history.

    What's a General Ledger?

  2. Several things factor into the salary of a financial advisor. Here's a look.
    Investing Basics

    How Much Does A Financial Advisor Earn?

  3. These 5 strategies offer financial advisors a blueprint on how to grow their practices.

    Growth Strategies For Financial Advisors

  4. If you're considering investing in China and want to know when to buy, sell, hold or stay away, consider these economic indicators.

    Eyeing China? Consider These Economic Indicators

  5. Whether you're a saver or a financial advisor who want to give their clients a leg up, these 8 tips are essential for financial planning.
    Investing Basics

    8 Essential Tips For Retirement Saving