Ethical Investment and Financial Services MCQs
Ethical Investment and Financial Services MCQs
Our team has conducted extensive research to compile a set of Ethical Investment and Financial Services MCQs. We encourage you to test your Ethical Investment and Financial Services knowledge by answering these 40+ multiple-choice questions provided below.
Simply scroll down to begin!
1: A person within a corporation with a ____ obligation to act in the best interests of the corporation and its shareholders.
A. Fiduciary
B. Depositary
C. Trustworthy
D. Fictitious
2: The______ requirement of executives and managers to act in the best interests of the company and its shareholders ?
A. Fiduciary
B. Depositary
C. Trustworthy
D. Fictitious
3: Insider trading of participation in trading in securities that are based on material,______information in violation of a fiduciary or similar duty to a corporation and its shareholders or to the source of the information?
A. Nonpublic
B. Confidential
C. Exclusive
D. Pandemic
4: London Interbank Offered Rate lIBOR stands for :London Interbank Offered Rate?
A. True
B. False
5: Any Material information that if made public would not have a significant effect on the market value of a corporation’s securities.?
A. True
B. False
6: Any _______ information that has not yet been made available to the trading markets.
A. Nonpublic
B. Confidential
C. Exclusive
D. Pandemic
7: Persons such as accountants, lawyers, and investment bankers who become privy to outside information in the performance of their general services?
A. True
B. False
8: A______ person who receives information from a tipper (a corporate or temporary insider) also inherits a fiduciary duty to shareholders?
A. Tippee
B. Temporary insider
C. Design patent
D. Intellectual property
9: What do financial ethics focus on?
A. Corporate nondisclosure
B. Preserving fairness and honoring trust
C. Participating in insider trading
D. Information related to legal liability
10: A person who is trusted by others because of his or her superior knowledge is called a ______.
A. Temporary insider
B. Corporate insider
C. Financier
D. Fiduciary
11: What type of conduct is imperative for the entire financial services industry?
A. Privileged
B. Corporate
C. Ethical and honest
D. Immoral and unfair
12: What is the Security and Exchange Commission?
A. An independent state government agency responsible for prosecuting investors
B. An independent federal government agency responsible for protecting investors
C. An independent federal government agency responsible for prosecuting bankers
D. An independent state government agency responsible for protecting bankers
13: What refers to trading in securities that is based on material, nonpublic information and violates fiduciary duty?
A. Temporary insider
B. Insider trading
C. Corporate insider
D. Informed investor
14: How is material information related to nonpublic information?
A. Both promote the inherent goodness of bankers.
B. Both have a significant effect on the market value of corporate securities.
C. Both have trust in banks and in the financial markets.
D. Both provide banks with extra capital.
15: Directors and managers have a fiduciary duty to the ______.
A. Financial market
B. Corporation
C. Tippee
D. Wall Street
16: Information that has not yet been made available to the public is called ______.
A. Corporate insider
B. Insider trading
C. Material information
D. Nonpublic information
17: What is it called when marketing materials for investments contain incomplete information, as in the case of Goldman Sachs?
A. Unfair
B. Trader
C. Tippee
D. Fraud
18: Accountants, lawyers, and investment bankers employed on a contract basis and privy to inside information in the performance of their professional services are called ______.
A. Corporate insider
B. Temporary insiders
C. Nonpublic information
D. Insider trading
19: How are corporate insiders and temporary insiders related?
A. Both have roles in insider trading.
B. Both prioritize concern for social interests over wealth.
C. Both have a fiduciary obligation to the corporation.
D. Both sit on the board of directors.
20: In the United States v. O’Hagan case, why was O’Hagan held liable for the purchase of Pillsbury stock and call options, even though his purchase was not considered insider trading under the classical theory of insider trading?
A. He sold the stock at a high rate that profited Pillsbury under the misappropriation theory.
B. He negotiated with Grand Metropolitan using the classical theory for insider trading.
C. He purchased large sums of stocks using the classical theory on insider trading.
D. He breached a duty of loyalty to the source of the information under the misappropriation theory.
21: The laws on insider trading have evolved over the years and are ______.
A. Crystal clear
B. Still ambiguous
C. Immoral
D. Illegal
22: Why was Texas Gulf Sulphur under investigation?
A. Because Texas Gulf Sulphur remained the world’s leading sulphur producer
B. Because Texas Gulf Sulphur was drilling on Kidd Creek Mine
C. Because an insider purchased investments that were not made public
D. Because Texas Gulf Sulphur conducted aerial geophysical surveys over the Canadian Shield
23: In reference to the Stewart case, who would be considered the tippee?
A. Robert Stewart
B. Kendle Perella
C. Richard Cunniffe
D. Sean Stewart
24: Why is LIBOR an important rate in finance?
A. It allows the avoidance of the banks’ Treasury Group.
B. It is the key benchmark to set borrowing rates between banks.
C. It allows borrowing analysis based on reports.
D. It allows banks to set interest rates to profit in their favor.
25: In the Barclays case, what are the two distinct phases of LIBOR fixing?
A. Submit higher LIBOR rates that benefit banks’ trading positions, and engage in increasing LIBOR submissions in response to negative media comments about the bank.
B. Submit lower LIBOR rates that benefit their own trading positions, and engage in increasing LIBOR submissions in response to positive media comments about the bank.
C. Submit higher or lower LIBOR rates that benefit their own trading positions, and engage in lowering its LIBOR submissions in response to negative media comments about the bank.
D. Submit higher LIBOR rates that benefit the customers’ positions, and engage in lowering its LIBOR submissions in response to positive media comments about the bank.
26: Why is there a need for transparency in the world of investment banking?
A. To regulate investments and submit market rates
B. To keep investment banks from sharing vital information
C. To allow insider trading to be legal
D. To keep investment banks from deceiving clients for profit
27: What are the two complex financial tools central to the Goldman case?
A. Equity shares and acquisitions
B. The credit default swap and collateralized debt obligations
C. Merger and acquisitions
D. Investment transactions and equity shares
28: Why did employees at Wells Fargo open phony accounts?
A. They were showing new employees how to open accounts.
B. Their managers told them to open the accounts.
C. They felt pressured to meet sales goals.
D. They were looking for bonus money.
29: Why were these sales tactics not picked up by internal auditors?
A. The managers told the monitors the practices were not a part of their business.
B. The auditors were not informed of the audit.
C. Branch managers would not allow access to the information.
D. Bank branches were given 24-hour notice before internal monitors arrived.
30: Julie Tishkoff, a whistle-blower in the Wells Fargo sales scam, was ______ for reporting fraudulent behavior in 2009.
A. Demoted
B. Promoted
C. Terminated
D. Transferred
31: What was the reason for the Wells Fargo investigation?
A. Bankers were opening unauthorized accounts.
B. Salaries and compensation needed to be determined.
C. Company profits went down.
D. Employee morale was fluctuating.
32: How did Wells Fargo start to restore their reputation?
A. The CEO apologized.
B. The bank eliminated all banking fees.
C. The bank stopped their cross-selling strategy.
D. The bank refunded customers.
33: What was the government trying to prove in the Stewart case?
A. Sean Stewart received some kind of personal benefit.
B. Robert Stewart was innocent of the charges against him.
C. There was no wrongdoing in sharing information with family.
D. Richard Cunniffe was not involved in sharing information with others.
34: __________ portfolio construction starts with asset allocation.
A. Bottom-up
B. Top-down
C. Upside-down
D. Side-to-side
35: According to the capital asset pricing model, in equilibrium _________.
A. Directly related to the beta of the stock
B. It is always the minimum-variance portfolio on the efficient frontier.
C. Zero alphas
D. All securities' returns must lie on the security market line
E. Along the security market line
36: __________ funds stand ready to redeem or issue shares at their net asset value.
A. Closed-end
B. Index
C. Open-end
D. Hedge
37: A stock's alpha measures the stock's ____________________.
A. An abnormal return
B. Relative strength analysis
C. Abnormal return
D. Unsystematic
38: The nyse acquired the ecn _______, and nasdaq recently acquired the ecn ________.
A. I, II, and III
B. (P0-P1)/ margin*P0
C. Market liquidity decreased
D. Archipelago; Instinet
39: All else the same, an american-style option will be ______ valuable than a ______ style option.
A. More; European-
B. Less; European-
C. Less; Canadian-
D. More; Canadian-
40: An american call option gives the buyer the right to _________.
A. Buy the underlying asset at the exercise price on or before the expiration date
B. Buy the underlying asset at the exercise price only at the expiration date
C. Sell the underlying asset at the exercise price on or before the expiration date
D. Sell the underlying asset at the exercise price only at the expiration date
41: The membrane's permeability to sodium ions is at its maximum at label _____.
A. A
B. B
C. C
D. D
List of Ethical Investment and...
Available in:
Ethical Investment and Financial Services MCQs
