SIE (Securities Industry Essentials) Practice Exam

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Based on the advisor's advice, what is the obligation being addressed?

reasonable-basis obligation
fiduciary duty
market manipulation guideline
conflict of interest policy

The correct answer is: reasonable-basis obligation

The correct answer is A reasonable-basis obligation. The advisor's advice refers to a financial advisor providing guidance or recommendations to a client. In this case, the advisor is addressing their responsibility to conduct thorough research and have a reasonable basis for their advice. This means they must have a valid and logical reason for making a recommendation, and it should be based on relevant and accurate information. Option B, fiduciary duty, generally refers to a broader responsibility of acting in a client's best interest. Options C and D, market manipulation guideline and conflict of interest policy, do not directly relate to the specific obligation of providing sound and well-researched advice.