Register
An investment adviser has researched a promising company and has decided to buy its stock for its proprietary account and for the account of each of the firm's clients. Which action on the part of the
16,737 views
14 votes
14 votes
An investment adviser has researched a promising company and has decided to buy its stock for its proprietary account and for the account of each of the firm's clients. Which action on the part of the adviser is acceptable

User HichamELBSI
by
3.0k points

1 Answer

13 votes
13 votes

Answer:

The investment adviser first buys the shares for its customer accounts and then places the order necessary to buy the shares for its proprietary account

Step-by-step explanation:

Since buying a large position for the adviser's customers might tend to push the price of the stock up, the adviser cannot benefit from this by "front running" the customer orders by placing an order to buy the stock for its proprietary account just before placing the big customer orders to buy. The best procedure is to buy the stock for the customers first and then for the adviser's proprietary account. Remember that the adviser is a fiduciary who must place his clients' interests first.

User Inputforcolor
by
2.9k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that Group of answer choices bond interest is deductible for tax purposes. interest must be
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend
Link Copied!