SIE practice questionmediumFront-running
A registered representative learns a large institutional client will place a substantial buy order. The representative buys shares for their own account just before executing the client’s order. This is called:
- AInsider trading
- BChurning
- CFront-running✓ Correct answer
- DBest execution
Explanation
Why C — Front-running
Front-running is trading ahead of a customer’s large order for personal gain. Churning is excessive trading, insider trading uses nonpublic material info, and best execution is a trading standard.
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