General Securities Sales Supervisor (Series10) Practice Exam

What type of power of attorney must be granted to allow a husband to trade and write checks from his wife's brokerage account?

1. Limited power of attorney

2. Full power of attorney

3. Durable power of attorney

4. Non-durable power of attorney

The correct answer is: Full power of attorney

The correct answer is that a full power of attorney must be granted to enable a husband to trade and write checks from his wife's brokerage account. This type of power of attorney provides the agent (in this case, the husband) with comprehensive authority to act on behalf of the principal (the wife) in a wide range of financial matters. This includes making trades in her brokerage account and accessing funds for writing checks. A full power of attorney ensures that the agent can perform all actions that the principal could do, and is crucial for trading purposes since brokerage firms typically require this level of authority. Other types of powers of attorney, such as a limited power of attorney, would restrict the husband's authority to specific transactions or situations, which would not meet the requirements for trading or full access to the brokerage account. A durable power of attorney refers to the continuity of authority even if the principal becomes incapacitated, and a non-durable power of attorney would terminate upon the principal's incapacitation. While both durable and non-durable powers of attorney have their uses, they do not grant the full range of powers needed to trade and manage a brokerage account as implied in this question.