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:

Sales Tax

A tax imposed by government on the sale of goods and services, usually calculated as a percentage of the selling price.

Manufacturing Tax

Manufacturing tax refers to taxes imposed on goods produced within a country; the specifics of these taxes can vary by location and product type.

Accounting Firm

An accounting firm is a business that provides services related to accounting, including audit, bookkeeping, tax preparation, and financial consultancy.

Service Company

A business that provides intangible products or services to customers.