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NEW QUESTION: 1
A FINRA member who is a principal underwriter under the definition provided in the Investment Company
Act of 1940 is permitted to sell variable contracts through another broker-dealer only if:
I. the broker-dealer is also a FINRA member.
II. there is a sales agreement in effect between the underwriter and the broker-dealer.
III. the broker-dealer is also a principal underwriter as defined by the Investment Company Act of 1940.
A. both I and II are true.
B. all three statements-I, II, and III-are true.
C. any one of the three statements-I, II, or III-are true.
D. either I or II is true.
Answer: A
Explanation:
A FINRA member who is a principal underwriter under the definition provided in the
Investment Company Act of 1940 is permitted to sell variable contracts through another broker-dealer
only if both statements I and II are true. The broker-dealer must also be a FINRA member, and there must
be a sales agreement in effect between the underwriter and the broker-dealer.

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