Business Practices第 56 / 100 题
An agent handles a conservative retiree's account and generates 60 round-trip trades in six months, producing commissions that consume a large share of the account's value. This practice is best described as:
a.Churning, which is excessive trading in light of the customer's resources, objectives, and account character
b.Front-running, because the agent traded ahead of the customer
c.A permissible active management style since the customer never objected
d.Selling away, because the trades were placed outside the firm
解析
Churning is trading that is excessive in size or frequency given the customer's financial resources, investment objectives, and the nature of the account, and it is judged by the pattern rather than by any single trade. The customer's silence is not consent and does not cure the violation. Front-running involves trading ahead of a known block order, and selling away involves transactions outside the employing firm, neither of which is described here.
法律依据: NASAA Model Rule免费刷完整 100 道题库 — 无需注册。
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