Exam 3: Money, How We Get It, and Where It Goes: Accounting, Finance, and Investment Ethics

Warren Buffett called derivatives "a financial weapon of mass destruction."

There are two principal harm-based arguments against insider trading. One is that the practice is harmful to individual investors who have no insider access. The other is that:

It seems clear in the wake of so many criminal cases against CEOs that the business culture will soon make drastic changes to the way in which it conducts business.

Futures contracts, put options, call options, and swaps are all forms of _______________.

Another name for a "pyramid scheme" is a

Hedge funds are carefully regulated by the government to make them safe investments.

Providing information to investors is one function of the _________.

Ferguson writes that inflation has gone up since 1979.

Partnoy thinks that it is a myth that anyone ever really owns derivatives.

Moore argues that ____________________ threatens the fiduciary relationship, which is important to business.

Opportunism, or shirking, occurs as a result of what?

Hedge funds require time and careful study, and therefore it is rather difficult to make any money quickly by investing in them.

Paternalism is an argument used to justify restricting the investments of at-risk investors.

What could cause the "doomsday scenario" that McDonald describes?

Money has no value in itself; its value is rather a representation of mutual trust.

Many of today's most common basic types of business fraud have been around for centuries.

Most architects of deceptive business practices have learned to do so from the research findings of psychologists and behavioral economists.

In 2006, the total value of the stock market was higher than the economic output of the whole world.

Fannie Mae, Ginnie Mae, and Freddie Mac were created to:

Niall Ferguson says that the financial crisis of 2008 happened because: