Regulations and Ethics in the Investment Industry Quiz
28 Questions
2 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What does ethical conduct encompass according to the text?

  • Following a simple algorithm or formula
  • What different societal groups consider to be ethically correct behavior (correct)
  • Only what is legally required
  • Strict adherence to laws and regulations

    • What is required to act ethically according to the text?

  • The ability to think through the facts of the situation and make good choices (correct)
  • Clear laws or rules
  • Following a prescribed algorithm
  • Strict adherence to laws or rules

    • What is necessary for good ethical judgment according to the text?

  • Ignoring the interests of stakeholders
  • Strict adherence to laws and regulations
  • Following a prescribed algorithm
  • Actively considering the interests of stakeholders (correct)

    • What is emphasized as a requirement for ethical behavior according to the text?

    <p>The ability to make considered decisions</p> Signup and view all the answers

    What is mentioned as going beyond what is legally required according to the text?

    <p>Ethical conduct</p> Signup and view all the answers

    What is indicated as insufficient to ensure the ethical behavior of investment professionals and market participants?

    <p>Laws and regulations</p> Signup and view all the answers

    What does ethics require according to the text?

    <p>Actively considering the interests of stakeholders</p> Signup and view all the answers

    What is a potential downside of using laws to reduce unethical behavior in the investment industry?

    <p>Laws may be vague, conflicting, and too narrow in scope</p> Signup and view all the answers

    What challenge arises due to the time taken for regulators' responses to enact new laws?

    <p>Problematic practices may continue or grow during the time taken for enacting new laws</p> Signup and view all the answers

    How do market participants may interpret laws, according to the text?

    <p>In the most advantageous way possible</p> Signup and view all the answers

    What is a consequence of laws varying across countries or jurisdictions?

    <p>Questionable practices may move to places with lax laws</p> Signup and view all the answers

    Why may increased regulation and monitoring not always be the best mechanism to reduce unethical behavior?

    <p>Regulators' responses may take significant time</p> Signup and view all the answers

    What is a potential drawback of a new law reducing or eliminating existing activity?

    <p>It may simultaneously create an opportunity for a different, but similarly problematic, activity</p> Signup and view all the answers

    What is a potential issue with laws being subject to interpretation and compliance by market participants?

    <p>Market participants may delay compliance until a later date</p> Signup and view all the answers

    What is a drawback of laws designed reactively in response to a crisis?

    <p>They may take significant time to be enacted</p> Signup and view all the answers

    What is a potential consequence of laws being subject to interpretation by market participants?

    <p>Market participants may interpret the law in the most advantageous way possible</p> Signup and view all the answers

    What is a challenge associated with laws varying across countries or jurisdictions?

    <p>Questionable practices may move to places that lack relevant laws</p> Signup and view all the answers

    What is a potential downside of using laws to reduce unethical behavior in the investment industry?

    <p>Laws may inadvertently create opportunities for different problematic activities</p> Signup and view all the answers

    What is a drawback of laws designed proactively to address existing or anticipated practices?

    <p>Laws may be too narrow in scope</p> Signup and view all the answers

    What is a potential issue with laws that follow market practices?

    <p>Laws may not always address existing or anticipated practices</p> Signup and view all the answers

    What is a consequence of laws being subject to compliance by market participants?

    <p>Market participants may choose to interpret the law in the most advantageous way possible</p> Signup and view all the answers

    What does ethical conduct go beyond according to the text?

    <p>Legal requirements</p> Signup and view all the answers

    What is emphasized as necessary for acting ethically according to the text?

    <p>Good choices in the absence of clear laws or rules</p> Signup and view all the answers

    What is indicated as insufficient to ensure ethical behavior of investment professionals and market participants?

    <p>Laws and regulations</p> Signup and view all the answers

    What does good ethical judgment require according to the text?

    <p>Actively considering the interests of stakeholders</p> Signup and view all the answers

    Why is increased regulation and monitoring not always the best mechanism to reduce unethical behavior according to the text?

    <p>There is no simple algorithm for ethical action</p> Signup and view all the answers

    What is a potential issue with laws being subject to interpretation and compliance by market participants?

    <p>Varying laws across countries or jurisdictions</p> Signup and view all the answers

    What is mentioned as a consequence of laws varying across countries or jurisdictions?

    <p>Ethical conduct going beyond legal requirements</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser