Question

A certificant shall not lend money to a client. Exceptions to this Rule include which of the following?

I. The client is on Medicaid, over age 65.
II. The client is a member of the certificant's immediate family.
III. The client requests a loan.
IV. The certificant is an employee of an institution in the business of lending money.

a. II, III, IV
b. II, IV
c. IV
d. I, IV
e. I, III

Answer 1

A certificant can lend money to a client if the client is an immediate family member or if the certificant is an employee of a lending institution, with other provided options not being relevant exceptions. Thus, the correct answer is option b. II, IV.

Step-by-step explanation:

The question relates to the ethical rules that a certificant, such as a financial advisor or planner, must abide by when dealing with clients. Specifically, it asks under what exceptions a certificant is permitted to lend money to a client. The options given suggest various scenarios where an exception may be possible.

A correct response, based on standard professional ethics in finance, would be that a certificant could lend money to a client if:

• The client is a member of the certificant's immediate family.
• The certificant is an employee of an institution that is in the business of lending money.

Therefore, the exceptions to this rule include immediate family members and instances where the certificant is employed by a lending institution. The other options, such as the client's use of Medicaid, being over age 65, or simply requesting a loan, are not typically acceptable reasons for a personal loan from a certificant to a client outside of these specific exceptions.

The answer to this question would be option b. II, IV, which signifies that the exceptions to the rule include immediate family members and situations in which the certificant is an employee at a lending institution.