California Real Estate Practice Exam

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Commingling is defined as?

The legal combination of funds
The illegal mingling of the broker's money and the client's funds
The transfer of property rights
The mixing of personal and business expenses

The correct answer is: The illegal mingling of the broker's money and the client's funds

Commingling refers to the illegal practice of mixing a broker's money with a client's funds, typically for personal gain. This goes against ethical and legal standards in the financial industry, as it can result in loss of funds and breach of trust between the broker and their clients. Options A, C, and D do not accurately define commingling and are incorrect. Option A may seem correct as it mentions the combination of funds, but it is specifically referring to it being a legal practice. Option C may also seem plausible, but it is too broad and does not specifically relate to financial transactions. Option D is also incorrect as it does not involve the mixing of client funds. Option B is the only option that accurately defines commingling as an illegal and unethical practice in the financial industry.