Choosing your broker - Quiz

Lesson 10 – Choosing your broker

1 / 20

What is the role of a stockbroker?

They advise on investment strategies.

They allow you to trade shares online.

They provide financial loans.

They build your investment portfolio.

2 / 20

How much is the common minimum deposit required to start a brokerage account?

$500-$1000

$2000-$3000

$5000-$6000

$10000-$11000

3 / 20

Why is it important to check the broker’s commission rates?

It determines the broker’s salary.

It can significantly impact your capital, especially if you’re a frequent trader.

It affects the broker’s reputation.

It influences the stock market rates.

4 / 20

Which broker charges a fixed eight dollars per transaction, irrespective of the number of shares you transact?

Interactive Brokers

TD Ameritrade’s Thinkorswim

Charles Schwab

E*TRADE

5 / 20

Why is it important to check if the broker is regulated?

It guarantees high returns.

It ensures the broker is reputable and adheres to financial norms.

It secures lower commission rates.

It offers exclusive access to certain markets.

6 / 20

What do margin rates refer to?

The profit margins of brokers.

The interest charged by brokers on loans for purchasing stocks.

The minimum margin required for trading.

The annual rate of return.

7 / 20

Why is it important to test a broker’s trading platform?

To ensure you can make quick profits.

To verify the broker’s commission rates.

To ensure the platform aligns with your trading preferences and is user-friendly.

To check the broker’s financial stability.

8 / 20

Why should you check the range of markets a broker offers?

It helps predict the stock market trends.

It provides an idea of the broker’s global reach and access to diverse opportunities.

It reveals the broker’s commission rates.

It guarantees high returns.

9 / 20

How can you assess the quality of a broker’s customer service?

By checking their commission rates.

By understanding their trading platform.

By checking their response time, communication skills, and patience.

By assessing their financial stability.

10 / 20

Who is Interactive Brokers more suited for?

Long-term investors

Short-term traders

Forex traders

Cryptocurrency traders

11 / 20

Who is Thinkorswim by TD Ameritrade more suited for?

Long-term investors

Short-term traders

Forex traders

Cryptocurrency traders

12 / 20

What is the significance of understanding your trading frequency when choosing a broker?

It determines the markets you can trade in.

It influences the broker’s commission structure that applies to you.

It decides the broker’s customer service quality.

It affects the broker’s financial stability.

13 / 20

What additional charges might some brokers impose?

For data feeds and trading charts.

For trading in specific markets.

For a higher number of trades.

For providing financial advice.

14 / 20

Why should you prefer brokers regulated by the US or Australian authorities?

They provide a higher rate of return.

They guarantee the security of your investments.

They offer lower commission rates.

They offer exclusive access to certain markets.

15 / 20

What’s the implication of failing to meet the required minimum number of trades each month with some brokers?

Closure of the account.

Higher commission rates.

A minimum inactivity fee.

Lower margin rates.

16 / 20

What does a custodian fee refer to?

Fee for maintaining the brokerage account.

Fee for holding the shares on your behalf.

Fee for providing financial advice.

Fee for providing access to data feeds.

17 / 20

Why is it advised for long-term investors not to use margin?

It is illegal.

It can be risky due to interest charges.

It reduces the rate of return.

It requires a higher minimum deposit.

18 / 20

What does Thinkorswim by TD Ameritrade primarily focus on?

Global markets.

US markets.

European markets.

Asian markets.

19 / 20

Why can low commission rates and a small minimum deposit amount be too good to be true?

The broker may make money in other, less transparent ways.

The broker may not be financially stable.

The broker may not offer a good trading platform.

The broker may not be well-regulated.

20 / 20

What is a reliable source for broker comparisons and reviews?

Forbes.com

CNBC.com

Brokerage-review.com

WallStreetJournal.com

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