Ethics and Trust in the Investment Profession Flashcards
Which of the following statements is most accurate? Ethics can be described as:
a commitment to upholding the law.
an individual’s personal opinion about right and wrong.
a set of moral principles that provide guidance for our behavior.
a set of moral principles that provide guidance for our behavior.
Which of the following statements is most accurate? Standards of conduct:
are a necessary component of any code of ethics.
serve as a general guide regarding proper conduct by members of a group.
serve as benchmarks for the minimally acceptable behavior required of members of a group.
serve as benchmarks for the minimally acceptable behavior required of members of a group.
characteristics of professions:
specific education & expert knowledge
defined framework of practice & behaviour
ethical approach and service orientation
driving forces of new professions
govt & regulators, demand for professional advantages
how professions normalize practioner behaviour
Normalize Practitioner Behaviour
Provide a Service to Society
Client Focused
High Entry Standards
Encourage and facilitate continuing education
monitor professional conducts
collegial
recognized oversight bofies
encourage engagement of members
evolution of professions
Which of the following statements is most accurate?
Investment professionals have a special responsibility to act ethically because:
the industry is heavily regulated.
they are entrusted to protect clients’ assets.
the profession requires compliance with its code of ethics.
they are entrusted to protect clients’ assets.
Which of the following statements best completes the following sentence? Professionals use their specialized knowledge and skills:
in service to others.
to advance their career.
for the exclusive benefit of their employers.
in service to others.
Which of the following statements is most accurate? A profession’s code of ethics:
includes standards of conduct or specific benchmarks for behavior.
ensures that all members of a profession will act ethically at all times.
publicly communicates the shared principles and expected behaviors of a profession’s members.
publicly communicates the shared principles and expected behaviors of a profession’s members.
benefits of studying ethics
preparation for complex situations
avoidance of unintentional consequences
challenges of studying ethics
overconfidence
underestimation of situational influences
check the box mentality
employees focus on what they can do within rules rather than what they should do ethically
Which of the following will most likely determine whether an individual will behave unethically?
The person’s character
The person’s internal traits and intrinsic motivation
External factors, such as environmental or cultural elements
External factors, such as environmental or cultural elements
Which of the following statements is most accurate?
Large financial rewards, such as bonuses, are the most powerful situational influences.
When decision making focuses on short-term factors, the likelihood of ethical conduct increases.
Situational influences can motivate individuals to act in their short-term self-interests without recognizing the long-term risks or consequences for themselves and others.
Situational influences can motivate individuals to act in their short-term self-interests without recognizing the long-term risks or consequences for themselves and others.
roles of laws and regulations
may codify ethical behaviour but have limitations in ensuring ethical conduct
may design laws reactively, vaguely, conflicting or too narrow in scope
Questionable practices to move to areas lacking relevant laws
Interpretation and compliance by participants may vary
Laws insufficient to ensure ethical behaviour
Which of the following statements is most accurate?
Increased regulations are the most useful means to reduce unethical behavior by market participants.
Regulators quickly design and implement laws and regulations to address practices that adversely affect the fairness and efficiency of markets.
New laws designed to reduce or eliminate conduct that adversely affects the markets can create opportunities for different, but similarly problematic, conduct.
New laws designed to reduce or eliminate conduct that adversely affects the markets can create opportunities for different, but similarly problematic, conduct.
