True or false -Placing your trades with a discount broker can save you as much a

Question

True or false

-Placing your trades with a discount broker can save you as much as 80% of the commission charged by a full-service broker.

-Many brokerage firms require that disputes between individual investors and brokers be settled through litigation.

- Most online brokers execute their own trades on the floor of the New York Stock Exchange.

- Day traders should consider having online accounts with two separate brokerage firms.

- Current price information on shares of a company's stock is often accompanied by statistics on the recent price behavior of that stock.

- Investors are protected from market losses by the SIPC insurance offered by some full-service brokers.

-If the market moves rapidly, an online trader may experience difficulty placing a trade.

-The Standard & Poor's indexes are all based on market values which consider the number of shares outstanding.

-Commission structures vary with the type of security being traded, the type of broker involved and the size of the order.

-If you have a problem with an online trade, you should immediately email your complaint to the broker.

2. Which one of the following can be considered a negative aspect of online investing?

A. Online trading is fast and efficient.

B. Online investors tend to trade more frequently.

C. Online trading is available to the average investor.

D. Online investors pay lower costs per trade than investors using a broker.

3. Which one of the following indexes reflects the percentage change in share prices relative to a base of 100?

A. Value Line composite

B. S & P 500

C. DJIA

D. AMEX composite

Explanation / Answer

- Placing trade with discount brokerage ..... 80% commission - True

- Many online firms require .... through litigation - False; they instead require resolution through arbitration.

- Most online brokers execute ....... NYSE - True

- Day traders should ..... 2 seprate brokerage - True

- Current price information on shares ...... price behavior of that stock - True

- Investors are protected ...... some full-service brokers.- False; it only protects against custody function not market losses

- If the market moves rapidly, an online trader may experience difficulty placing a trade - False

- The Standard & Poor's indexes are all based on market values which consider the number of shares outstanding - True - it is weighted by market cap

- Commission structures vary with the type of security being traded, the type of broker involved and the size of the order - True

- If you have a problem with an online trade, you should immediately email your complaint to the broker - True

2. Online investors tend to trade more frequently.

3. DJIA

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