A:

A. acceptable if the client is young enough to recover from any losses before retiring.
B. acceptable if the firm mandates that an agent trade excessively in clients' accounts to generate commissions, so long as the agent does not lose any money.
C. not acceptable - agents who trade excessively are committing fraudulent activity and will be disciplined by the Administrator.
D. acceptable if the agent is trying to "paint the tape".




Correct answer: C
A, B and are false, as excessive trading is known as churning and is generally not acceptable. D is incorrect, because "painting the tape" is where someone is trying to create the illusion of artificial market activity by simultaneously buying and selling stock.



RELATED FAQS
  1. Do real estate agents get paid hourly or by salary?

    Learn about real estate commissions and how real estate agents, including listing agents, buyer's agents and real estate ... Read Answer >>
  2. How can I tell when a real estate agent might be lying to me?

    Find out what real estate agents are likely to lie about, the reasons for the lies and how to protect yourself from unscrupulous ... Read Answer >>
  3. How do real estate agents get listings?

    Learn about how real estate agents get listings in top real estate markets, as well as in smaller areas, through utilizing ... Read Answer >>
  4. How do real estate agents market themselves?

    Find an agent by checking popular real estate circulars featuring desirable neighborhoods and call the agent to ask questions ... Read Answer >>
  5. What does churning mean?

    A. Trading with yourself, or with someone else in attempt to make the tape appear more active than it really is.B. Trading ... Read Answer >>
  6. Why do real estate agents fail?

    Becoming a successful real estate agent requires a mindset that is built for success and strong, consistent action that buttresses ... Read Answer >>
Related Articles
  1. Financial Advisor

    How to Find the Best Life Insurance Agent

    Choosing a life insurance agent is the first and most important step in obtaining coverage. Buyers should pay attention to five key factors.
  2. Managing Wealth

    How To Negotiate A Real Estate Agent's Commission

    If you're looking to save some money when selling your home, negotiating your agent's commission is a good way to do it.
  3. Investing

    How To Find The Best Real Estate Agent

    Most people don't have the time, expertise or motivation to go it alone and finding a good real estate agent becomes essential to enjoying a smooth real estate transaction.
  4. Investing

    Top 5 Signs Of A Bad Real Estate Agent

    The signs of a bad agent go beyond whether your home sells quickly.
  5. Investing

    Understanding Real Estate Commissions: Who Pays?

    When you set out to buy or sell a house, one factor worth considering is the real estate agent's fees.
  6. Investing

    How Do Real Estate Agents Get Paid?

    Here's how real estate commissions on home sales really work. And, yes, they're negotiable.
  7. Investing

    6 Questions For Your Realtor

    Before you start working with a real estate agent – especially if you're the one paying the agent's commission – make sure you've made the right choice.
  8. Insurance

    What Your Life Insurance Agent Makes – On You

    Being paid by commission gives life insurance agents an incentive to sell bigger policies and specialized financial products. Remember that before you buy.
  9. Investing

    5 Ways To Save On Real Estate Fees

    Even a 1% reduction in real estate commissions can save you thousands of dollars.
RELATED TERMS
  1. Real Estate Agent

    A person with a state/provincial license to represent a buyer ...
  2. Trading Authorization

    The level of power entrusted to a broker or agent granting specific ...
  3. Acceptance Market

    Investment market based on short-term credit instruments. An ...
  4. Calculation Agent

    An entity that determines the price of an investment product ...
  5. Agency Plant

    The amount of presence that an insurance company has in a market.
  6. For Sale By Owner - FSBO

    A method of selling property without the use of an agent or broker. ...
Hot Definitions
  1. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  2. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  3. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the ...
  6. Border Adjustment Tax

    A tax levied on goods based on where they are sold – exported goods are exempt from tax; those imported and sold in the ...
Trading Center