Your next-door neighbor, a kind, elderly lady, just discovered that her stock account had been excessively traded in an inappropriate manner, mainly to generate excess commissions. This is an example of Question 14 options: account theft. black market trading. high turnover trading. churning. None of these.
Churning, or excessivetrading of assets in a client's account by a broker to generate commissions, is an unlawful and unethical practice.
Churning cannot be quantified, it may be demonstrated by the repeated purchasing and selling of stocks or other assets that fall short of the client's investing goals.
Churning is the practice of exchanging assets excessively in a client's brokerage account in an effort to earn commissions.
What is Trading?
Trading, as opposed to investing, is the act of purchasing and selling financial instruments including stocks, bonds, currencies, and commodities.
Learn more about Trading with the help of the given link:
