SIE (Securities Industry Essentials) Practice Exam

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Which of the following statements is true regarding a customer account held as tenants in common?

The ownership is divided equally among the tenants
The ownership can be transferred to a designated beneficiary upon death
The ownership of the decedent's assets is governed by their will or state law
The ownership cannot be divided

The correct answer is: The ownership of the decedent's assets is governed by their will or state law

A customer account held as tenants in common means that two or more individuals have ownership of a property or asset, with each owning a specific undivided interest. This type of ownership does not necessarily have to be divided equally, as stated in option A. Option B is incorrect because ownership cannot be transferred to a designated beneficiary upon the death of one of the tenants, as the asset is still jointly owned by the remaining tenants. Option D is incorrect because the ownership can be divided among tenants, as long as each individual holds a specific undivided interest. Option C is the correct statement because the ownership of the decedent's assets in a tenants in common account is governed by their will or state law. In other words, upon the death of one of the tenants, their share of the asset will be distributed according to their will or applicable state laws.