A Comparison of Full-Service Brokers and Discount Brokers Suggests Which

question 113

Multiple Choice

A comparison of full-service brokers and discount brokers suggests which of the following?

• A) Discount brokers are almost always the best choice because most investors are knowledgeable enough to handle all types of transactions without the extra services provided by full-service brokers.
• B) Most investors should avoid either type of broker and buy their stocks by placing their own orders directly with the exchanges.
• C) Competition has blurred the distinction between the two types of brokers.
• D) Full-service brokers are almost always the best deal. They cost a little more, but they provide significant additional services.

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Definitions:

Bypassing

A communication barrier where the same words or phrases are interpreted differently by different people, leading to misunderstandings.

Static Evaluation

The tendency to view people or situations as unchanging despite evidence to the contrary.

Polarization

The division into two sharply contrasting groups or sets of opinions or beliefs.

Referents

Objects, events, or concepts that words or phrases denote or stand for in communication.