A customer enters a bank branch where he has a savings account and is approached by the branch manager who asks: Are you interested in earning a higher rate of return"

Complete Question: A customer enters a bank branch where he has a savings account and is approached by the branch manager who asks: "Are you interested in earning a higher rate of return than we offer on our savings accounts? Let me introduce you to our securities representative." If the customer opens a securities account, which disclosure is NOT required to be made?

A. Securities products are not insured by the Federal Deposit Insurance Corporation

B. Securities products are not deposits or other obligations of the financial institution

C. Securities products are subject to investment risks, including possible loss of principal

D. Securities products are subject to taxation of income and capital gains

Answer:

D. Securities products are subject to taxation of income and capital gains.

Explanation:

Disclosure (D) in the question above is not required to be made since it is a known fact that taxes will be paid on the income from the securities just like almost any other income.

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