Laws & RegulationsCâu 16 / 100
An agent 'churns' a client's account. This unethical practice is best defined as:
a.Recommending long-term buy-and-hold securities
b.Excessive trading designed to generate commissions rather than to benefit the client
c.Rebalancing a portfolio once per year
d.Diversifying across asset classes
Giải thích
Churning is excessive trading in a customer's account driven by the agent's desire for commissions rather than the client's interests. It is a prohibited practice regardless of whether individual trades are suitable. Frequency and cost relative to the client's objectives are key indicators.
Trích dẫn luật: Uniform Securities ActLuyện miễn phí toàn bộ 100 câu hỏi — không cần đăng ký.
Câu hỏi liên quan cùng chủ đề
- Under the Investment Advisers Act, an adviser's brochure (Form ADV Part 2) must be delivered to a client:
- An investment adviser wants to enter a contract that assigns the advisory agreement to another firm following a merger. Under the Uniform Securities Act, assignment of an advisory contract generally requires:
- Which of the following best describes a fiduciary obligation that an investment adviser owes but a broker-dealer historically did not owe under a pure suitability standard?
- Under the Uniform Securities Act, the term 'security' would NOT typically include:
- An agent shares in the profits and losses of a customer's account. Under NASAA standards, this is permitted only if:
- A client sends an unsolicited written complaint to an agent alleging unauthorized trading. The agent should:
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