CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

Compared to ethical behavior, unethical behavior in the investment industry may have the following impact:

I. less participation in the financial markets
II. higher operating costs
III. more profit
A. I and II
B. I and III
C. I, II and III
Explanation: The investment industry is based almost entirely on trust. Unethical behavior ultimately harms clients, investment firms, professionals, and others.

User Contributed Comments 6

User Comment
ashish100 You better watch out for the SEC if you selected C!
denisw123 I would argue that unethical behavior CAN lead to more profit. It's a fact. You can make money by behaving unethically. This is not the same thing as saying you SHOULD.
jabiller I agree with denisw on this one. This is greed which eventually catch up to them but I took the question at face value.
kingirm Agree with denis and jabiller. In real life more often, unethical behaviour is a result of prospectw of higher profit.
fatherlee Why would some behave unethically if there is no more profit?
Harneet07 I agree, insider trading is unethical but the only reason to conduct such an act is on the basis of earning an extremely abnormal excess return. The ambiguity with the exam being a multiple-choice test can be detrimental.
You need to log in first to add your comment.