Question

f an agent indulges in commingling, she _____. Select one: a. most likely will not be liable for loss to the principal b. violates the prohibition against dual agency c. will not be liable for any loss to the principal if the property is not wrongfully used d. bears the risk of any loss to the principal

Answer 1

Answer:Option D

Explanation:

Commingling means the money of various investors are pooled together to trade with securities. This is usually done by the agents who acts as the investment managers they collect money from various investors and put it together as single fund. The advantages of this method are the fees is lower.

Some people indulge in illegal activities of combining investors money with their personal money. This helps the agents to invest large funds by pooling in funds. Any risk on the principal amount has to be borne by the agent.