Business Ethics and Legal Compliance Quiz

What is the relationship between legal and ethical conduct?

They are not always the same (correct)

Legal conduct is always ethical

Ethical conduct is always legal

They are always the same

In what circumstances may an act of civil disobedience be considered ethical but illegal?

When it aligns with organizational policies

When it is not considered unethical

When it violates existing local laws (correct)

When it is in response to ethical laws

What is an example of conduct in the investment industry that may be legal but considered unethical?

Trading while in possession of material nonpublic information (correct)

Participating in peaceful protests

Complying with local laws

Following organizational policies

What does whistleblowing refer to?

Disclosure of dishonest, corrupt, or illegal activity Signup and view all the answers

How may a whistleblower's actions be perceived?

Illegal but ethical by some Signup and view all the answers

What is an example of behavior that may be ethical but deemed illegal in certain jurisdictions?

Peaceful protests Signup and view all the answers

What is the term for the area where ethics and laws may conflict?

Whistleblowing Signup and view all the answers

What may some investment professionals and CFA Institute consider unethical?

Trading while in possession of material nonpublic information Signup and view all the answers

What is an example of an action that may be deemed illegal but considered ethical by some?

Whistleblowing Signup and view all the answers

What is the relationship between laws and ethical actions?

Laws often codify ethical actions for better societal outcomes Signup and view all the answers

Why is complying with specific written disclosures in marketing considered an ethical action?

It creates more satisfactory outcomes conforming to stakeholders’ ethical expectations Signup and view all the answers

What is the outcome of complying with disclosure requirements mandated by securities regulators?

Reduces the risk for clients and employers Signup and view all the answers

Why is conduct that reduces risks, such as following disclosure rules, considered ethical?

It leads to better outcomes for stakeholders and conforms to ethical expectations Signup and view all the answers

What is the consequence of compliance with disclosure rules for investment professionals?

Reduces the risk of legal action and disciplinary measures Signup and view all the answers

Why is compliance with disclosure rules beneficial for investment professionals?

It reduces the risk of clients investing without understanding the risks involved Signup and view all the answers

What is the impact of compliance with disclosure rules on regulators' actions?

Reduces the risk of regulators initiating investigations or filing charges Signup and view all the answers

Why is compliance with disclosure rules important for the reputation and future prospects of professionals and their employers?

It reduces the risk of jeopardizing reputation and future prospects Signup and view all the answers

What is an example of an ethical action as per laws and regulations?

Telling the truth and providing specific written disclosures in marketing Signup and view all the answers

How does compliance with disclosure rules benefit stakeholders?

It reduces the risk of clients investing without understanding the risks involved Signup and view all the answers

What is the consequence of not complying with disclosure rules?

Increased risk of regulatory investigation and sanctions Signup and view all the answers

How does compliance with disclosure rules benefit the clients?

Reduces the risk of investing without understanding the risks involved Signup and view all the answers

What is the ethical implication of following disclosure rules?

It leads to better outcomes for stakeholders and conforms to ethical expectations Signup and view all the answers

What is the purpose of disclosure requirements mandated by securities regulators?

To ensure investors understand the risks of investing Signup and view all the answers

What is the potential impact of clients investing without understanding the risks involved?

Increased risk of client complaints and legal action Signup and view all the answers

Why is conduct that reduces risks, such as following disclosure rules, considered ethical?

It leads to better outcomes for stakeholders and conforms to ethical expectations Signup and view all the answers

Business Ethics and Legal Compliance Quiz

Questions and Answers

What is the relationship between legal and ethical conduct?

In what circumstances may an act of civil disobedience be considered ethical but illegal?

What is an example of conduct in the investment industry that may be legal but considered unethical?

What does whistleblowing refer to?

How may a whistleblower's actions be perceived?

What is an example of behavior that may be ethical but deemed illegal in certain jurisdictions?

What is the term for the area where ethics and laws may conflict?

What may some investment professionals and CFA Institute consider unethical?

What is an example of an action that may be deemed illegal but considered ethical by some?

What is the relationship between laws and ethical actions?

Why is complying with specific written disclosures in marketing considered an ethical action?

What is the outcome of complying with disclosure requirements mandated by securities regulators?

Why is conduct that reduces risks, such as following disclosure rules, considered ethical?

What is the consequence of compliance with disclosure rules for investment professionals?

Why is compliance with disclosure rules beneficial for investment professionals?

What is the impact of compliance with disclosure rules on regulators' actions?

Why is compliance with disclosure rules important for the reputation and future prospects of professionals and their employers?

What is an example of an ethical action as per laws and regulations?

How does compliance with disclosure rules benefit stakeholders?

What is the consequence of not complying with disclosure rules?

How does compliance with disclosure rules benefit the clients?

What is the ethical implication of following disclosure rules?

What is the purpose of disclosure requirements mandated by securities regulators?

What is the potential impact of clients investing without understanding the risks involved?

Why is conduct that reduces risks, such as following disclosure rules, considered ethical?

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