Question

"A customer places an order to sell 100 shares of ABC at the market. The initial execution report shows the trade occurring at $75.50. The firm later discovers that the trade occurred at $75.13. Which statement is TRUE?"

Answer 1

Answer: The customer will receive $7,513 less any applicable commissions

Explanation;

This points to an error in confirmation not an error in execution. As such, the firm will not be held liable for the error and will simply have to send the correct confirmation. The customer will therefore get the correct trade price of $75.13 which will result in them receiving $7,53 less any applicable commissions.

Had it been an error of execution in that the firm made a mistake and sold at a price they were not to, they would incur the cost.