Answered

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An investment adviser has researched a promising company and has decided to buy its stock for its proprietary account and for the account of each of the firm's clients. Which action on the part of the adviser is acceptable

Sagot :

gurleendoel16

Answer:

The investment adviser first buys the shares for its customer accounts and then places the order necessary to buy the shares for its proprietary account 

Explanation:

Since buying a large position for the adviser's customers might tend to push the price of the stock up, the adviser cannot benefit from this by "front running" the customer orders by placing an order to buy the stock for its proprietary account just before placing the big customer orders to buy. The best procedure is to buy the stock for the customers first and then for the adviser's proprietary account. Remember that the adviser is a fiduciary who must place his clients' interests first.

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