Which one of the following statements is correct?
A)Most brokerage agreements require that disputes be settled in a court of law.
B)Arbitration is a formal legal process for settling disputes related to brokerage accounts.
C)Churning is the preferred method of providing deep-discount brokerage services.
D)Discount brokers only provide order execution services.
E)Full-service brokers frequently provide financial planning services to clients.

Question

Quizplus · Accepted Answer

Full-service brokers typically provide a wide range of services, including financial planning, investment advice, and executing trades on behalf of clients. Option A is incorrect as many brokerage agreements require disputes to be settled through arbitration, not a court of law. Option B is partially correct, as arbitration is a common method of settling disputes related to brokerage accounts, but it is not a formal legal process. Option C is incorrect, as churning (excessive trading to generate commissions) is not a preferred method of providing any type of brokerage service. Option D is incorrect, as discount brokers may also provide additional services such as research and investment advice.

Which One of the Following Statements Is Correct