Question

Jermaine gets a call from his broker. The broker recommends that Jermaine immediately buy a particular stock because the price will rise soon. He says Jermaine can either invest new money or sell off some of his other securities to raise cash. He says that if Jermaine purchases over $1,000 worth of the stock, there is no commission. Why does Jermaine suspect that his broker is giving bad advice?

Answer 1

Selling securities to raise the cash to pay for other securities is illegal.
The broker told Jermaine about a breakpoint to avoid paying a load.
The broker insisted on immediate actions, which is not how long-term investing works.
Brokers should not persuade clients to make trading decisions over the telephone.

Answer 2

@JoannaBlackwelder

Answer 3

@jim_thompson5910

Answer 4

What do you think?

Answer 5

i say c

Answer 6

D makes no sense

Answer 7

Agreed, it's perfectly fine to make transactions over the phone. It would be ridiculous to have to go to the broker's office every time you need to make a trade.

Answer 8

Of course, research would be done, but doing it over the telephone is fine.

Answer 9

@jim_thompson5910 you mean D is the answer mate?

Answer 10

@JoannaBlackwelder help me

Answer 11

@jim_thompson5910 i see what you did there lol

Answer 12

@JoannaBlackwelder help

Answer 13

@jim_thompson5910 D is the answer

Answer 14

no I ruled out D. Read what I posted again.

Answer 15

But brokers shouldn't persuade investors over the telephone

Answer 16

it asks

Why does Jermaine suspect that his broker is giving bad advice?

and one answer choice is

D. Brokers should not persuade clients to make trading decisions over the telephone.

and this is not a bad thing to do. Brokers do this all the time or else nothing would get done. This is fine to do as long as you research what you're diving into (and not taking the broker's word for it)

Answer 17

@jim_thompson5910 ahh sorry im slow

Answer 18

i understand now

Answer 19

so they have to go to the broker's office every time to make a trade? There's nothing unique about going to the office since the broker can fax over documents or send pictures or something. This is handy if the client lives far away or is busy.

Answer 20

The broker insisted on immediate actions, which is not how long-term investing works.

Answer 21

yep, the pressure to do it "NOW NOW NOW" is a bad sign

Answer 22

thats what im saying its

Answer 23

its c

Answer 24

@jim_thompson5910 Verify please. its C

Answer 25

correct

Answer 26

@Thank you mare @jim_thompson5910

Answer 27

instead, I would scratch out "long term". Any type of investment needs careful planning and research

Answer 28

right