SIE Exam Question 633: Answer and Explanation

Question: 633

Which of the following describes the illegal practice of excessive buying and selling of securities in a customer's account without considering the customer's investment goals? Its primary goal is to generate commissions that benefit the broker.

  • A. Capping
  • B. Churning
  • C. Front running
  • D. Painting the tape

Correct Answer: B

Explanation:

Churning describes the illegal practice of excessive buying and selling of securities in a customer's account without considering the customer's investment goals. Its primary goal is to generate commissions that benefit the broker.

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