Question

FINRA members are required to carry a Blanket Fidelity Bond covering officers and employees for loss of fidelity. What does this coverage include?

1) Misplacement
2) Forgery
3) Securities loss
4) Fraudulent trading

Answer 1

FINRA members are required to carry a Blanket Fidelity Bond providing insurance coverage for officers and employees against various financial losses due to dishonest acts. This includes protection for misplacement, forgery, securities loss, and fraudulent trading. All given choices are correct.

Step-by-step explanation:

FINRA members are required to carry a Blanket Fidelity Bond, which is a type of insurance coverage. This coverage includes protection for officers and employees against various types of financial loss due to dishonest acts.

Specifically, the coverage includes:

1. Misplacement: This refers to the unintentional loss or misplacement of funds or property, such as cash, securities, or documents.
2. Forgery: This covers losses caused by the fraudulent signing or alteration of documents, including forged signatures.
3. Securities loss: This protects against losses stemming from the theft or unauthorized use of securities, such as stocks or bonds.
4. Fraudulent trading: This provides coverage for losses resulting from fraudulent or unauthorized trading activities.

The Blanket Fidelity Bond ensures that members of FINRA are financially protected in case of any fidelity-based losses caused by the aforementioned actions.

Hence, all of the given options are correct.