Ken wants to buy $30,000 of shares in a mutual fund, but his broker recommends buying $3,000 at 10 regular intervals spaced over five months instead of all at once. How might the broker have a conflict of interest in this purchase?

Select the best answer from the choices provided.
This method benefits the broker because it spreads out his earnings over five months.
This method gives the broker fees for 10 trades instead of just one.
This method gives Ken time to consider the investment over the long term.
This method can only succeed if the broker commits insider trading.

Question

Ken wants to buy $30,000 of shares in a mutual fund, but his broker recommends buying $3,000 at 10 regular intervals spaced over five months instead of all at once. How might the broker have a conflict of interest in this purchase?


Select the best answer from the choices provided.
This method benefits the broker because it spreads out his earnings over five months.
This method gives the broker fees for 10 trades instead of just one.
This method gives Ken time to consider the investment over the long term.
This method can only succeed if the broker commits insider trading.

anonymous · Answer

@JoannaBlackwelder

joannablackwelder · Answer

I would guess b if he gets paid per trade.

anonymous · Answer

i dont why i had A

anonymous · Answer

A conflict of interest (COI) is a situation occurring when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation.

anonymous · Answer

multiple interest and the guy is having 10 trade

anonymous · Answer

@JoannaBlackwelder what you think?

joannablackwelder · Answer

Yeah. The conflict of interest would be that the broker gets paid more for more trades instead of suggesting what is best for the client.

anonymous · Answer

right