Which of the Following Statements Is True Regarding Full-Service Brokers

question 74

Multiple Choice

Which of the following statements is true regarding full-service brokers?

• A) They typically seek clients with at least $25,000 in their accounts.
• B) They derive only a small percentage of their revenues from commissions.
• C) They compete primarily on price and services offered.
• D) Less than 10 percent of U.S. households now use a full-service broker.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows, given a specific rate of return.

Discount Rate

During discounted cash flow analysis, this is the rate employed to determine the present value of anticipated future cash flows.

Cash Flows

The total amount of money being transferred into and out of a business, often used as an indicator of a company's financial strength.

Discount Rate

The discount rate employed in discounted cash flow analysis to ascertain the present worth of future cash flows.