Which One of the Following Statements Is Correct

question 56

Multiple Choice

Which one of the following statements is correct?

• A)Most brokerage agreements require that disputes be settled in a court of law.
• B)Arbitration is a formal legal process for settling disputes related to brokerage accounts.
• C)Churning is the preferred method of providing deep-discount brokerage services.
• D)Discount brokers only provide order execution services.
• E)Full-service brokers frequently provide financial planning services to clients.

---

Definitions:

Implicit Costs

The opportunity costs of using resources that a company already owns, not directly paid for with cash.

Accounting Profit

The total revenue of a business minus the explicit costs, representing the financial gain in accounting terms.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the additional return over the investor's opportunity cost.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production instead of earning revenue from these resources elsewhere.