The Documents Signed When a Customer Opens a Brokerage Account

question 1

Multiple Choice

The documents signed when a customer opens a brokerage account

• A) establish a legal relationship between the customer and the brokerage firm.
• B) may be signed by a minor child provided that the money being invested belongs to the child.
• C) serve as an informal relationship between the customer and the stockbroker.
• D) limit the customer to dealing only through that brokerage firm.

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Definitions:

Outstanding Stock

Shares of a company that have been issued and are currently held by investors.

Net Income

The net income a company earns following the subtraction of all costs, taxes, and expenses from its total revenue.

Madison Corporation Bonds

Debt securities issued by Madison Corporation to raise capital, promising to pay back with interest.

Accrued Interest

Interest that has accrued but remains unpaid.