Which of the following is an example of churning:
A) An investor who frequently trades for his account
B) An advisor who reinvests dividend and interest payments regularly for a client
C) An advisor who executes frequent trades to take advantage of market movements
D) An advisor who executes frequent trades to generate income for himself

Question

Which of the following is an example of churning: 
A) An investor who frequently trades for his account
B) An advisor who reinvests dividend and interest payments regularly for a client
C) An advisor who executes frequent trades to take advantage of market movements
D) An advisor who executes frequent trades to generate income for himself

Quizplus · Accepted Answer

Churning refers to the practice of an advisor executing excessive trades in a client's account primarily to generate commissions for themselves, rather than to benefit the client.

Which of the Following Is an Example of Churning