Answered

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Which of the following is called a stock assumption?

A. When a client assumes the agent will be investing in stocks and bonds only for the client's benefit.
B. When one insurer invests in the stock of a client's company.
C. When one insurer insures another similar insurance company.
D. When an agent invests in stocks and bonds for his/her own benefit.

Sagot :

GinnyAnswer

Final answer:

Stock assumption involves beliefs tied to stock-related actions, emphasizing the importance of acting in the client's best interests and diversifying investments to manage risks.


Explanation:

Stock assumption refers to the belief that certain actions or investments related to stocks will be made for specific purposes. In the context of fiduciary relationships, such as with a full-service stockbroker, it is crucial for the agent to act in the client's best interests when managing investments. Diversification is a key strategy to mitigate risks associated with investing in individual firms and is commonly recommended to spread investments across a variety of companies.


Learn more about Stock assumption here:

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