Ask Question
BusinessBusiness
6 March, 06:52

The manager of a discretionary account places client funds in a suitable investment because it provides a higher commission than alternatives that are also suitable for the client. The selected investment subsequently appreciates in value. This investment manager did not:

a. place the client's interests first.

b. face an ethical dilemma because the investment was profitable.

c. have a conflict of interest because the investment was suitable for the client.

+1
Answers (2)
  1. 6 March, 07:09
    0
    Answer: c. have a conflict of interest because the investment was suitable for the client.

    Explanation: A conflict of interest situation arises when an individual (the manager of a discretionary account in this instance) has competing interests or loyalties because of their duties to more than one person or organization and serving one interest could adversely affect a duty owed to make decisions for the benefit of a third party (the client). The manager did not have a conflict of interest because the investment was suitable for the client. However, a manager who knowingly places clients funds in an investment which are not in their best interests, but which earn the manager a bigger commission, would be guilty of conflict of interest.
  2. 6 March, 07:10
    0
    have a conflict of interest because the investment was suitable for the client.

    Explanation:

    A manager as an agent of the client is supposed to always act in the interest of his principal.

    In this scenario the manager places client funds in a suitable investment because it provides a higher commission than alternatives that are also suitable for the client. The selected investment subsequently appreciates in value.

    The manager acted in the interest of the client and this resulted in return on investment
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The manager of a discretionary account places client funds in a suitable investment because it provides a higher commission than ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
What is the primary role of our banking system?
Answers (2)
A company paid for 12 months of internet services for $800 on October 1. They recorded the transaction by debiting Prepaid Internet Service and crediting cash. Which of the following adjusting journal entries, recorded on December 31, is correct? A.
Answers (1)
In the United States, which assessment system measures inflation? A. demand for goods B. supply of goods OC. consumer price index D. money supply in the economy
Answers (1)
You have just purchased a car and, to fund the purchase, you borrowed $27,500. If your monthly payments are $515.27 for the next 5 years, what is the APR of the loan?
Answers (2)
Cracker Corporation began a special promotion in July 2016 in an attempt to increase sales. A coupon was included in various print advertisements. Customers could send in five coupons for a free prize. Each prize cost Cracker Corporation $2.00.
Answers (1)
New Questions in Business
According to the quantity theory: (A) unemployment is everywhere and always a monetary phenomenon. (B) inflation is everywhere and always a monetary phenomenon. (C) the equation of exchange does not hold true.
Answers (1)
You have informed users that you need to bring the machine down at the end of the day to perform routine maintenance.
Answers (1)
In the US, public insurers such as Medicare are forbidden by law from applying formal health technology assessments - and in particular, cost-effectiveness analyses - in deciding whether to cover new health technologies, no matter how expensive.
Answers (1)
Select the correct answer. Which of these is not considered for deduction of federal income tax? A. interest earned from state bonds B. earnings from commission C. earnings from tips or bonus D. income from awards and prizes
Answers (1)
Corporate finance is concerned with the different aspects of a business's financial management. The chief financial officer (CFO) is the top financial position in the organization and oversees several tasks.
Answers (1)
Home » Business » The manager of a discretionary account places client funds in a suitable investment because it provides a higher commission than alternatives that are also suitable for the client. The selected investment subsequently appreciates in value.
Sign Up Forgot Password?