Question

A customer has an existing cash account that holds many different positions in blue chip stocks. A. The customer has an investment objective of moderate growth and income. B. The customer contacts his representative, stating that "I think the market will be flat for a while, but I don't want to see my portfolio return drop." C. The registered representative recommends that the customer sell covered calls against some of the stocks held in the customer account. D. The representative_

Answer 1

Answer:

The correct answer is B. The customer contacts his representative, stating that "I think the market will be flat for a while, but I don't want to see my portfolio return drop."

Explanation:

One of the defining characteristics of first class shares is their quality, expressed here by their ability to increase dividends. We know that investing in dividend growth tends to comfortably exceed market averages over time, especially when dividends are reinvested to buy more shares. Seen in this way, the purchase of frontline stocks can be seen as an indirect way to follow a strategy that we know works well.