SIE Exam Question 681: Answer and Explanation

Question: 681

Which of the following is defined as the benefit provided to an asset manager by a broker-dealer as a result of commissions generated from financial transactions executed by the broker-dealer?

• A. 12b-1 compensation
• B. Administrative compensation
• C. Hard-dollar compensation
• D. Soft-dollar compensation

Correct Answer: D

Explanation:

Soft-dollar compensation is defined as the benefit provided to an asset manager by a broker-dealer as a result of commissions generated from financial transactions executed by the broker-dealer.