If Your Stockbroker Gives You Bad Advice and You Lose

question 58

Multiple Choice

If your stockbroker gives you bad advice and you lose your investment:

• A) the government will reimburse you similar to reimbursing depositors if a bank fails.
• B) the government will not reimburse you for the loss; you are not protected from bad advice by your stockbroker.
• C) these losses would be covered under FDIC insurance.
• D) your investment would only be covered if the stockbroker was employed by a bank.

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Definitions:

Gains From Trade

Gains from trade refer to the net benefits that countries or individuals obtain by selling what they produce and buying what they consume more efficiently through trade.

International Trade

The exchange of goods and services between countries, driven by comparative advantage and resulting in increased economic efficiency.

Export Cheese

The process of selling and shipping cheese to other countries from the country of origin.

Tariff

A tax imposed by a government on imported goods or services to regulate trade and protect domestic industries.