Question

If you are trading using someone else’s money or you are managing someone else’s money, your objective should be to _____________

A) maximize your profits

B) act for the benefit of your client and place your clients’ interests before your own

C) act for the benefit of your client and place your clients’ interests before your own always observing the law

D) Avoid unnecessarily worrying your client by not presenting them with marked to market losses but only reporting realized losses

Answer 1

If you are trading using someone else’s money or you are managing someone else’s money, your objective should be to _____________

A) maximize your profits (While this is the underlying reason for the trading, this solely cannot be the objective)

B) act for the benefit of your client and place your clients’ interests before your own (While this is correct to certain extent, abiding by the laws and stipulated trading practices are equally and more important)

C) act for the benefit of your client and place your clients’ interests before your own always observing the law: This is the CORRECT answer, as the abiding the laws and trading practies are important.

D) Avoid unnecessarily worrying your client by not presenting them with marked to market losses but only reporting realized losses This is incorrect, as the client need to be informed periodically about the status of the portfolio for them to assess the risk and consider Mark -to-Market in their portfolio accounts.

Answer (C)