Problem regarding the maintenance fees associated

Reference no: EM13987881

When you are choosing which brokerage firm(s) to use to execute your trades, you should consider several factors. Also, a wide range of services claim to objectively recommend brokerage firms. However, many are actually sponsored by the brokerage firms themselves. Go to the Web site www.consumersearch.com/online-brokers/reviews and read the information provided under "Our Sources." Then follow the link for the Barron's ratings. Here you can read the Barron's annual broker survey and download the "How the Brokers Stack Up" report, which contains a list of fees. Suppose that you have $3,000 to invest and want to put it in a non-IRA account.

1. Are all of the brokerage firms suitable if you want to open a cash account? Are they all suitable if you want a margin account?

2. Choose two of the firms listed. Assume that you want to buy 200 shares of LLY stock using a market order. If the order is filled at $42 per share, how much will the commission be for the two firms if you place an online order?

3. Are there any maintenance fees associated with the account at either brokerage firm?

4. Now assume that you have a margin account and the balance is $3,000. Calculate the interest rate you would pay if you borrowed money to buy stock.

Reference no: EM13987881

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