Excessively Trading a Customers Account to Increase a Stockbrokers Commission

question 122

Multiple Choice

Excessively trading a customers account to increase a stockbrokers commission income is

• A) an acceptable method of timing the market to increase rates of return.
• B) called churning which is an illegal practice.
• C) probably unethical but yet is acceptable by the securities industry.
• D) permitted provided that the customer does not object.

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Definitions:

Labor Supply

The cumulative hours that workforce members are eager and able to dedicate to work, provided a set wage.

Marginal Productivity

The additional output resulting from the use of one more unit of a production factor.

Wages

Payments made to labor for their services, typically expressed per hour or per annum.

Wage Paid

The compensation given to labor for the service provided, usually calculated as an hourly, daily, or per task basis.