General Securities Sales Supervisor (Series10) Practice Exam

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Prepare for the General Securities Sales Supervisor Exam. Practice with flashcards and multiple choice questions, each with hints and explanations. Ace your exam!

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What is the intent behind the "NOT-NOT-MAY" disclosure?

To assure the client about safety
To clarify the roles of bank and broker-dealer
To inform about potential losses
To highlight deposit insurance

The correct answer is: To inform about potential losses

The "NOT-NOT-MAY" disclosure is designed to inform clients about potential losses in their investments. This disclosure emphasizes that while some securities may appear to be safe, they are not guaranteed by any insurance or governmental body. Therefore, investors must understand that they could lose some or all of their investment, especially in cases where the securities do not qualify for protections like federal deposit insurance. By clearly communicating this potential risk, the disclosure aims to ensure that clients have a realistic understanding of the nature of their investments, as well as the associated risks. This context helps investors make informed decisions, as they become aware that while investment opportunities may present the possibility of gains, they also carry inherent risk of loss. This understanding is crucial in helping clients to align their investments with their risk tolerance and overall financial goals.