Transactions involving buying and selling securities are conducted through stockbrokers, who are also known as account executives or financial consultants. When choosing a stockbroker, investors have three primary options: full-service brokers, discount brokers, and online brokers. Brokers who charge low overheads, low fees and commissions but offer no additional services other than executing trade transactions are called . While some brokers still operate exclusively in person or online, the distinction between the three types has become increasingly over the years. The chart that follows shows fees imposed by different discount brokers; as you can see, of them offer both online and broker-assisted trades. Broker ShareCo AmeriTrading TradeBuilder ShareFunder eExchange Commission for Online Trades Market Order Price $7.95 $9.99 $7.95 $9.95 $9.99 Limit Order Price $7.95 $9.99 $7.95 $9.95 $9.99 Commission for Broker-Assisted Trades Market Order Price $20.00 $44.99 $32.95 $19.95 $54.99 Limit Order Price $20.00 $44.99 $32.95 $19.95 $54.99 Because the fees charged for broker-assisted trades , it is shopping around before choosing a broker. Suppose you are a serious investor with large amounts of capital and prefer to deal directly with an in-person stockbroker. Which of the following statements regarding your options are true? Check all that apply. Choosing a discount broker can save 30–80% of the commissions charged by full-service brokers. Few full-service and discount brokers offer the online capabilities of online brokers. Active traders can generally negotiate reduced fees. Brokers prefer working with you if you’re a buy-and-hold investor.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Transactions involving buying and selling securities are conducted through stockbrokers, who are also known as account executives or financial consultants. When choosing a stockbroker, investors have three primary options: full-service brokers, discount brokers, and online brokers.

Brokers who charge low overheads, low fees and commissions but offer no additional services other than executing trade transactions are called .

While some brokers still operate exclusively in person or online, the distinction between the three types has become increasingly over the years. The chart that follows shows fees imposed by different discount brokers; as you can see, of them offer both online and broker-assisted trades.

	Broker
ShareCo	AmeriTrading	TradeBuilder	ShareFunder	eExchange
Commission for Online Trades
Market Order Price	$7.95	$9.99	$7.95	$9.95	$9.99
Limit Order Price	$7.95	$9.99	$7.95	$9.95	$9.99
Commission for Broker-Assisted Trades
Market Order Price	$20.00	$44.99	$32.95	$19.95	$54.99
Limit Order Price	$20.00	$44.99	$32.95	$19.95	$54.99

Because the fees charged for broker-assisted trades , it is shopping around before choosing a broker.

Suppose you are a serious investor with large amounts of capital and prefer to deal directly with an in-person stockbroker. Which of the following statements regarding your options are true? Check all that apply.

Choosing a discount broker can save 30–80% of the commissions charged by full-service brokers.

Few full-service and discount brokers offer the online capabilities of online brokers.

Active traders can generally negotiate reduced fees.

Brokers prefer working with you if you’re a buy-and-hold investor.

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