5-35 Directed brokerage is a trading abuse where a mutual fund and a brokerage agree to promote sales of certain funds in exchange for orders of specific stocks and bonds.

Question

Quizplus · Accepted Answer

Directed brokerage is a form of trading abuse where mutual funds and brokerages form an agreement where the brokerage receives orders of specific stocks and bonds in exchange for promoting the sales of certain mutual funds. This practice is considered unethical and a violation of the fiduciary responsibility of the mutual fund towards its investors.

5-35 Directed Brokerage Is a Trading Abuse Where a Mutual