Which of the Following Statements Regarding Commissions Charged by Full-Service

question 30

Multiple Choice

Which of the following statements regarding commissions charged by full-service brokers is not true?

• A)Commissions vary by product.
• B)The more complicated the transaction,the higher the commission.
• C)The commission on many bonds is already built into the trade.
• D)There is no commission on U.S.Treasury securities.

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Definitions:

APB No.25

Accounting Principles Board Opinion No. 25, which outlined the method for accounting for stock issued to employees, focusing primarily on the intrinsic value method.

Intrinsic Value

The inherent or fundamental value of an asset, investment, or company based on underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.

Diluted Earnings

A metric that shows a company's earnings per share if all convertible securities were converted into common stock, often indicating a worst-case scenario for earnings per share.

Capital Structures

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is used to finance its overall operations and growth.