General Securities Sales Supervisor (Series10) Practice Exam

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Which of the following is NOT a consideration for determining an "obvious error" in trading?

Percentage difference from prior trades
Market demand conditions at the time
Last reported transaction pricing
Price thresholds based on stock pricing

The correct answer is: Market demand conditions at the time

In determining an "obvious error" in trading, several factors are considered to ensure that the transactions reflect accurate market conditions. Market demand conditions at the time are generally not a direct consideration for assessing whether a trade is an obvious error. Instead, an obvious error is usually identified by looking at specific metrics such as the percentage difference from prior trades, the last reported transaction pricing, and established price thresholds based on the stock's pricing history. Percentage difference from prior trades provides a clear quantitative measure to identify whether a trade deviates significantly from usual trading patterns. Last reported transaction pricing offers a benchmark for evaluating the accuracy of current trades. Price thresholds establish predetermined levels at which trading irregularities may become apparent. These quantitative measures help market participants identify trades that drastically deviate from expected valuations. In summary, while market demand might influence pricing overall, it does not serve as a standalone metric for identifying an obvious error in individual trades, making it the right choice for this question.