A registered representative sells 1,000 shares of ABC for a customer at $30 per share, the current market price, with instructions to send the proceeds once the trade has cleared. On March 16, the board of directors for ABC declares a 3-for-2 split payable April 10 to shareholders of record on March 29. The customer receives a check for $20,000 and complains about the shortfall. In reviewing the customer's claim, the most likely finding would be that the customer:.

is right and the registered representative must reimburse the total proceeds from the transaction.

Explanation:

The customer's 1,000 shares "multiplied" to 1,500 shares since ABC split its stock. For every 2 ABC stocks, the stockholders received 3, and the customer should receive (1,000 / 2) x 3 = 1,500. The total value of the customer's stock didn't change since each stock instead of selling at $30, is now worth $20. The problem is that the RR paid the customer only for the original 1,000 stocks, not the 1,500.