Question

Which of the following duties refers to a broker’s obligation to represent the interests of their principals to the best of their ability, in the same way, they would represent themselves, acquiring and applying the necessary knowledge and information about relevant laws and regulations, the market, and subject property?
a. accounting
b. disclosure
c. loyalty
d. skill and care

Answer 1

Answer:

b. disclosure

Explanation:

In the business setting of buying and selling of shares and stocks, the buyer might have not have an indepth knowledge of the companies he or she is buying from hence the need to engage the services of a broker to cover such part.

The duties of the broker is diverse with far reaching effect but the most common duty which serves as a broker's obligation to the client is the disclosure.

The broker owes it a duty to offer full disclosure to his or client regarding to a particular stock tranactions- that is the gains and the bad sides of such. Since he is paid to offer such services, it is expected of him to do indepth study of any stock before offering his expertise advice. It would be bad for a stock broker to offer his client a stock worth penniless in real life but might looks healthy on papers due to the financial manipulations done by the country.