Basics Beginner: Broker Services

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
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.
2.
A full-service brokers commission is based on the total value of holdings in the customers account.
Choose wisely. There is only one correct answer.
False. Commissions are fees levied on each transaction the broker processes for the customer.
3.
Which of these investment strategies might be best executed by a discount broker?
Choose wisely. There is only one correct answer.
Buying and holding balanced mutual fund shares. A relatively uncomplicated and low-risk strategy, such as buying and holding mutual fund shares, may not require the advice of a full-service broker. With more aggressive and complicated strategies, the average investor should seek professional advice.
4.
Full-service brokers can offer all of the following services except _______.
Choose wisely. There is only one correct answer.
Tax preparation. Preparing taxes is not one of the services of a full-service broker, but all of the other listed options may be.
5.
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.