Test your knowledge

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1.
A brokerage may be able to offer checking and credit cards.
Choose wisely. There is only one correct answer.
True. Brokerage firms can offer asset management accounts that combine broker services with banking services such as checking and credit cards.
2.
You will make more money using a full-service broker because of their knowledge and expertise than you would by going it alone.
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False. While brokers may have more financial education and expertise, they are not clairvoyant. You have as good a chance at making money investing by doing your own homework carefully.
3.
The following statements are true of all brokers, except for _______.
Choose wisely. There is only one correct answer.
They provide advice on stock trades. While this is a service offered by full-service brokers, discount brokers provide only transaction services.
4.
A full-service brokers commission is based on the total value of holdings in the customers account.
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False. Commissions are fees levied on each transaction the broker processes for the customer.
5.
Brokers are allowed to give limited tax advice.
Choose wisely. There is only one correct answer.
True. Brokers can advise you on investments that will limit your exposure to taxes.