I. Merill Lynch and UBS are examples of discount brokers wholesale brokers full-
ID: 2793674 • Letter: I
Question
I. Merill Lynch and UBS are examples of discount brokers wholesale brokers full-service brokers -a. d. blue-chip brokers 2 Which of the following statements regarding discount brokers is true? a. All discount brokers offer on-line trading. b. Discount brokers only execute orders on stock transactions. c. Discount brokers may offer little investment advice. Discount brokers do not offer SIPC protection. 3. Which of the following requires a relatively large minimum investmer or higher? a. a cash account b. an asset management account c. a margin account d. a wrap account at a large brokerage firm 4. NYSE Specialists are required to a. maintain a bid-ask spread no greater than 1 cent per share b. maintain a fair and orderly market. c. buy when most others are selling, or vice versa. d. selling off inventory and maintaining strictly neutral positions 5. If an investor is attempting to buy a stock that is very volatile, it would be a. market order b. limit order c. stop-loss order d. cotingency orderExplanation / Answer
1 C
Merill Lynch and UBS are examples of full-service brokers and they provide a range of services right from financial planning to research.
2 C
Discount brokers offer reduced commission charges but they do not provide investment advisory services.
3 D
A wrap account is used for larger investments where the fees are generally paid as s percentage of investment amount.
4 B
NYSE specialists work to ensure a fair and orderly market. They also buy and sell when needed to balance demand-supply in the market. They are market makers who also execute trades and bid and ask match.
5 B
Limit order guarantees a set price when markets are volatile.
Stop loss order is used to sell stock when prices are declining.
All orders when they are getting executed become market orders
A contingency order entails two simultaneous transactions. An order is executed only if another order is executed first.