Deck 11: Ethics in Finance

Question 1

Efficiency in financial markets means that .

A)social well-being will be maximized
B)all investments will keep their value
C)overall yields will increase
D)fairness will always be maintained

Answer 1

C

Question 2

Agreements reached in financial trading are generally considered fair as long as.

A)everyone profits from the exchange
B)all traders involved are professionals
C)everyone has the same information
D)they are reached through good-faith bargaining

Answer 2

D

Question 3

Financial service people are most fundamentally in the business of selling .

A)savings
B)investments
C)stocks
D)bonds

Answer 3

B

Question 4

Due to the wide variety of financial products available,it is incumbent on the broker to help the customer select those that are .

A)suitable
B)liquid
C)cheapest
D)least risky

Question 5

If people in financial markets have unequal access to information,.

A)it is always unfair
B)this can happen in spite of their expertise
C)it should not impact their ability to make good decisions
D)a law has probably been broken

Question 6

Deception is an ever-present danger in financial selling mostly because .

A)the customer has to rely on the seller for all of the relevant information
B)financial salespeople often do not know very much about the securities they sell
C)there are not many laws that regulate financial services
D)no one ever has all the information at a given time

Question 7

Takeover offers must now be accompanied by enough time so that .

A)shareholders have opportunity to consider the offer carefully
B)consumers can decide whether to buy stock in the company
C)abusive tender offers can be rescinded by government action
D)there can be an orderly transition of control

Question 8

Financial dealings most fundamentally require the value of _.

A)freedom
B)time
C)trust
D)competence

Question 9

A financial broker may be tempted to "churn" because by doing so he can _ .

A)sell more shares
B)artificially inflate yields
C)get more customers
D)earn additional commissions

Question 10

Doing business in the financial markets most fundamentally presupposes that will be respected.

A)power
B)fairness
C)freedom
D)ideas