Anthony Would Like to Have His Brokerage Firm Handle More

question 266

Multiple Choice

Anthony would like to have his brokerage firm handle more of his financial needs because he has been pleased with the service provided when he bought and sold stocks and bonds. If he explores the services offered by such firms in more depth, he will find that

• A) federal laws prohibit brokerage firms from competing with banks, savings and loan associations, and credit unions.
• B) although brokerage firms can offer some banking services, they typically are less efficient at providing them than banks, because they specialize in buying and selling securities.
• C) brokerage firms are becoming serious competitors for banks and other depository institutions by offering high-yield combination savings and checking accounts and money market accounts, as well as certain types of loans.
• D) although brokerage firms offer attractive banking services, federal law prohibits individual investors from holding both a checking account and a securities account with the same firm.

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Definitions:

Tendered Bid

A formal offer submitted in response to an invitation to bid for a project, often including price and terms of service.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," implying that the buyer assumes the risk about the quality and condition of the product being sold.

Standard Form Contract

A contract with fixed terms prepared by a business.

Consideration

Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.