Trust in investment profession

Question 1

Suitability Standar

Fiduciary Standard.

Answer 1

Suitability

Matches the Requirement and risk tolerance with securities recommended

Fiduciary

Professional acts in the best interest of his clients

Question 2

Profession is a group of person who have

Answer 2

specialized expert knowledge

“abide” by a code of ethics (Seguem um coding de etica

Question 3

Framework for ethical decision making
(4)

Answer 3

1. Identify relevant facts , Stakeholders, Ethical principles and conflicts of interest
2. Consider alternative actions, situational situations, unintended consequencees and whether to seek additional guidance
3. decide and act

4.Reflect whether the results was how expected or not and why

Question 4

Code of ethics
What is?
What contains?

Answer 4

1. The values and expectations for professional behavior (minimum level of professional)

.May include standards of conduct, rules etc… May not

. Can be used by marketing purpose

.Doesn’t provide any minimum guarantee of ethical behavior

Question 5

Ethics refers to

Standard of professional conduct (CFA) is based on what?

Answer 5

study of moral principles

Study of good and bad behaviors

2. Based on the Code of ethics

Question 6

Unethical behavior of financial professionals

(Decrease tudo. Exemplificar o que. Aumenta ou diminui custo de capital?)

Ways to establish trust (60

Answer 6

. decrease trust
. Decrease income for the professionals
. Can affect allocation of capital
. Divert capital for its high value use
(↓ Econ growth)
. ↓ profits of firms (No credit. with clients)
. Less capital disposed by clients, high returns ( ↑Ke )
(cost of capital)
———————————————————
TRUST

1. High standard expertise
2. knowledge and skill
3. standards of ethical behavior
4. Monitoring professional conduct
5. Continuos education
6. Inspire others

Question 7

standard of ethics

Does legal standard is part of ethical standards?

what about illegal acts, they are all unethical?

Answer 7

Minimum level of expected behavior

no. Offset sometimes, but not aways

no. Some illegal acts are, actually, ethical

Question 8

Challenge to ethical behavior

Answer 8

Situational influences