Question

multiple choice question

a licensee has a duty to deposit all client funds in ______.

• an ira
• a special purpose acquisition fund
• a separate trust fund
• a third party

Explanation:

Identify the legal duty for handling client funds

Under real estate license law, a licensee must deposit all funds belonging to others (such as earnest money or security deposits) into a separate, dedicated account to avoid commingling.

Evaluate the given options

• "an IRA" is an individual retirement account, which is incorrect.
• "A Special Purpose Acquisition Fund" is unrelated to standard real estate client deposits.
• "A Separate Trust Fund" (or trust account/escrow account) is the legally mandated account for holding client funds.
• "A Third Party" is incorrect as the broker holds these funds in their trust account.

Select the correct option

The correct choice is "A Separate Trust Fund".

Answer:

• an IRA
• A Special Purpose Acquisition Fund
• A Separate Trust Fund (Correct answer)
• A Third Party