Canadian Securities Course (CSC) Practice Exam · Question
A financial advisor stands to earn a higher commission by recommending a specific proprietary mutual fund to a client, even though other non-proprietary funds may be more suitable. This situation represents a:
A conflict of interest arises when an individual's personal interests (like higher commissions) could potentially influence their decisions in a way that is not
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Question: A financial advisor stands to earn a higher commission by recommending a specific proprietary mutual fund to a client, even though other non-proprietary funds may be more suitable. This situation represents a:
Answer options: ✅ Conflict of interest
- Breach of trust
- Market manipulation
- Tied selling
Correct answer: Conflict of interest
Explanation: A conflict of interest arises when an individual's personal interests (like higher commissions) could potentially influence their decisions in a way that is not in the best interest of their client.
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