This question-specific review guide is tied to the answer reasoning for a PracticeTestVault item. Use it after you answer the question so the review stays focused on what the prompt actually tested.
What this question is testing
Objective: Prohibited practices
Prompt focus: Trading ahead of a customer's order for the personal benefit of the broker, when that order could move the market, is a prohibited practice known as:
Why the correct answer works
Front running
Correct. Trading ahead of a customer's order for personal benefit is the prohibited practice of front running.
Why the tempting wrong answer fails
The tempting wrong answer usually loses because it skips the key condition, priority, or evidence in the prompt.
Plain-language takeaway
Front running occurs when a broker uses advance knowledge of a customer's pending order to trade for their own account first. It is a fraudulent and prohibited practice that disadvantages the customer.
Simple analogy
Think of prohibited practices like following a short checklist: identify the clue, confirm the rule, and then make the move that fits this exact scenario.
How to review it before a retake
- Underline the command word and name what the question is asking before rereading the choices.
- Compare the correct answer against the closest distractor and write the exact detail that separates them.
- Retest this objective with a fresh question without looking at the rationale first.