Chapter 2 - Ethics And Regulations

Question 1

Ethics

Answer 1

A set of moral principles, or the principles of conduct governing an individual or a group.

Question 2

Professional standards

Answer 2

Guidelines set by professional associations based on fundamental ethical principles to guide the behaviour of individuals within the profession.

Question 3

Ethical dilemmas

Answer 3

Situations in which values, interests, and/or rules potentially conflict.

Question 4

Insider trading

Answer 4

Trading while in possession of material non-public information.

Question 5

Conflict of interest

Answer 5

When either the employee’s personal interests or the employer’s interests conflict with the interests of the client. Conflicts of interest can also arise when employee’s and employer’s interests conflict.

Question 6

Loyalty

Answer 6

An expectation that employees will place the employer’s interests above their own and will not misappropriate a company’s property.

Question 7

Framework for Ethical Decision Making

Answer 7

1) Identify the Ethical Issue(s) and Relevant Duties/Obligations
2) Identify Conflicts of Interest
3) Get the Relevant Facts

Identify Applicable Ethical Principles

4) Identify Factors That Could Be Affecting Judgment
5) Identify and Evaluate Alternative Actions
6) Seek Additional Guidance (this may occur earlier in the decision making process or not at all)
7) Act and Review the Outcome

Question 8

Ethical standard

Answer 8

Principles that support and promote desired values or behaviours.