SIE Exam Question 123: Answer and Explanation

Question: 123

An account in which customers with large portfolios pay a brokerage firm a flat annual fee that covers the cost of a money manager's services and the cost of commissions is called a __________ account.

• A. Cash
• B. Margin
• C. Collateral
• D. Wrap

Correct Answer: D

Explanation:

A wrap account is an account in which customers with large portfolios pay a brokerage firm a flat annual fee that covers the cost of a money manager's services and the cost of commissions.