Ethan Wants to Purchase Some Stock for the First Time

question 63

Multiple Choice

Ethan wants to purchase some stock for the first time.Which of the following is correct?

• A) His account executive should be encouraged to churn Ethan's account to maximize his return.
• B) He should use an online broker to get specific advice about purchasing stock.
• C) His purchase price will exactly equal the number of shares he purchases times the price per share and is known in advance.
• D) If he uses a market order, he can lock in the price at which he wants to buy the stock.
• E) His commission should be lower at an online broker than at a full-service broker.

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Definitions:

Analyze

The process of examining something methodically to understand its components, meaning, or relationships.

Bloom's Taxonomy

A classification system used in education to define and distinguish different levels of human cognition - i.e., thinking, learning, and understanding.

Evaluate

The process of assessing or judging the value, nature, or importance of something.

Bloom's Taxonomy

A classification system used to define and distinguish different levels of human cognition—i.e., thinking, learning, and understanding.