The firm is not required to make a best execution determination only if it has directed that the customer's order he routed to another firm for execution

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A4)
A registered representative (RR) receives an unsolicited order from a sophisticated investor to sell 100 shares of stock. The
customer has historically had good results in obtaining the best price for his shares on the NYSE. The customer tells the RR
that he only wants his order executed on the NYSE. Which of the following statements is most accurate with respect to the
firm's best execution obligation?
AO
The firm is not required to make a best execution determination.
The firm is not required to make a best execution determination only if it has directed that the customer's
order be routed to another firm for execution.
CO The firm is obligated to ascertain the best market and obtain the best price for the customer only if it acts as
principal in the transaction.
DO The firm must use reasonable diligence to ascertain the best market and sell in such market so that the
resultant price to the customer is as favorable as possible, regardless of the customer's specific instructions.
Transcribed Image Text:A registered representative (RR) receives an unsolicited order from a sophisticated investor to sell 100 shares of stock. The customer has historically had good results in obtaining the best price for his shares on the NYSE. The customer tells the RR that he only wants his order executed on the NYSE. Which of the following statements is most accurate with respect to the firm's best execution obligation? AO The firm is not required to make a best execution determination. The firm is not required to make a best execution determination only if it has directed that the customer's order be routed to another firm for execution. CO The firm is obligated to ascertain the best market and obtain the best price for the customer only if it acts as principal in the transaction. DO The firm must use reasonable diligence to ascertain the best market and sell in such market so that the resultant price to the customer is as favorable as possible, regardless of the customer's specific instructions.
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