Trading, Accounts & Prohibited ActsQuestion 230 of 398
When handling a customer order, a broker-dealer's obligation to seek the most favorable terms reasonably available under the circumstances is known as its duty of:
a.Suitability
b.Disclosure
c.Diversification
d.Best execution
Explanation
Best execution requires a firm to use reasonable diligence to obtain the most favorable price and terms for a customer order given current market conditions. Suitability concerns whether a recommendation fits the customer, which is a separate obligation.
Law Reference: Securities Exchange Act of 1934Practice all 398 questions free — no signup required.
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