SIE practice questionmediumInsider Trading
A broker uses material, nonpublic information to trade a security. This is known as:
- ABreakpoint selling
- BMarket manipulation
- CChurning
- DInsider trading✓ Correct answer
Explanation
Why D — Insider trading
Trading using material, nonpublic information is insider trading, which is illegal. Market manipulation involves distorting prices, churning is excessive trading, and breakpoint selling refers to mutual funds.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Prohibited Activities & Ethics questions
- Which best describes 'churning' in a brokerage account?
- A broker-dealer acting as principal charges a customer a 12% markup on a stock trade. Under FINRA's markup policy, this…
- A registered representative trades a stock based on nonpublic information about a company's upcoming merger. This…
- Placing trades near the close of the market specifically to influence the closing price of a security is known as: