Excessively Trading a Customers Account to Increase a Stockbrokers Commission

question 9

Multiple Choice

Excessively trading a customers account to increase a stockbrokers commission income is

• A) an acceptable method of timing the market to increase rates of return.
• B) called churning which is acceptable by the securities industry.
• C) called churning which is unethical.
• D) permitted provided that the customer does not object.

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Definitions:

Perceptual Hypotheses

A theory in psychology suggesting that perception involves the brain's activity of generating theories about what objects in the external world are most likely to account for the sensory information it receives.

Binocular Depth Cues

Visual information that the brain uses to determine the depth and distance of objects, requiring both eyes.

Linear Perspective

A technique in art and photography that creates the illusion of depth on a flat surface by converging parallel lines towards a single point on the horizon.

Place Theory

A theory in hearing that suggests different areas of the inner ear's basilar membrane respond to different frequencies, contributing to our perception of pitch.