SIE Exam Question 302: Answer and Explanation

Question: 302

When a broker-dealer acts on an agency basis to help a customer complete trades, the firm normally is compensated through

• A. mark-ups.
• B. commissions.
• C. transaction surcharges.
• D. asset-based fees.

Correct Answer: B

Explanation:

B - Acting as an agent, broker-dealers normally charge commissions. Acting as principals, they markup securities sold from their own inventory.