Financial Regulation And Ethics Quiz

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| By Jim.mahar
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Jim.mahar
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Quizzes Created: 1 | Total Attempts: 1,258
| Attempts: 1,258
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  • 1/10 Questions

    Ethical systems (better examples and reduced systemic conflicts) have been shown to reduce unethical behavior.

    • True
    • False
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About This Quiz

Do you work in the finance department? Do you know about the terms financial regulation and financial ethics? We have a quiz based on financial ethics. Play this quiz and evaluate your knowledge of the impact of ethics on financial law. Financial ethics are often overlooked. However, ethics in finance is much more than complying with rules. These ethics includes truthfulness, honesty, integrity, justice, and fairness in every aspect of finance. Learn more about this with the quiz below.

Financial Regulation And Ethics Quiz - Quiz

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  • 2. 

    According to the CFA guidelines, which of the following is NOT ethical

    • Putting your own interests before the client

    • Increasing transparency

    • Encouraging a reduction in conflicts of interest through better systems.

    • Continual learning and improvement for all knowledge workers.

    Correct Answer
    A. Putting your own interests before the client
    Explanation
    Putting your own interests before the client is not ethical according to the CFA guidelines. This means that as a finance professional, you should prioritize the client's interests and act in their best interest rather than pursuing your own personal gain. This principle is important for maintaining trust and integrity in the financial industry.

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  • 3. 

    Behaving ethically can _____

    • Lower likelihood of lawsuits and criminal charges

    • Reduce transaction costs

    • Lead to higher market values

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Behaving ethically can have several positive outcomes. It can lower the likelihood of lawsuits and criminal charges by ensuring that individuals and organizations act in accordance with legal and moral standards. Additionally, ethical behavior can reduce transaction costs by promoting trust and cooperation among parties involved. Lastly, behaving ethically can lead to higher market values as consumers and investors tend to favor companies with strong ethical practices, which can result in increased profitability and market performance. Therefore, all of the above statements are true.

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  • 4. 

    Which of the following is/are parts of the CAMELS rating criteria?

    • Asset quality

    • Capital adequacy

    • Earnings

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    The CAMELS rating criteria is a system used by bank regulators to evaluate the financial health of banks. It stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk. The question asks which of the given options are parts of the CAMELS rating criteria, and the correct answer is "All of the above" because asset quality, capital adequacy, and earnings are indeed components of the CAMELS rating criteria.

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  • 5. 

    A problem with trying to teach ethical behavior in business classes is

    • What is ethical to one person, may be unethical to another

    • Students often find it difficult to see themselves doing anything unethical

    • Ethics often seen as something better left for liberal arts and religion classes

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Teaching ethical behavior in business classes can be challenging because different individuals may have varying interpretations of what is considered ethical. What one person perceives as ethical, another may view as unethical. Additionally, students may struggle to envision themselves engaging in any unethical behavior, making it difficult for them to grasp the importance of ethical decision-making. Moreover, ethics is often regarded as a topic more suitable for liberal arts and religion classes, which further complicates its integration into business education. Therefore, all of the given reasons contribute to the difficulty of teaching ethical behavior in business classes.

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  • 6. 

    Which of the following is true?

    • Holding other things constant, ethical firms should have a higher price to book value.

    • Shareholder interests are solely dependent of short run cash flow maximization.

    • Nice firms finish last more often than not.

    • Buyer beware is all the ethics you will ever need.

    Correct Answer
    A. Holding other things constant, ethical firms should have a higher price to book value.
    Explanation
    Ethical firms should have a higher price to book value because they are more likely to have strong corporate governance practices and transparent financial reporting. This can attract investors who are willing to pay a premium for the company's shares, leading to a higher price to book value ratio. Additionally, ethical firms are less likely to engage in unethical practices or fraudulent activities, which can negatively impact their book value. Therefore, the market tends to value ethical firms more highly, resulting in a higher price to book value ratio.

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  • 7. 

    Ethical banking should overlook the consciousness of banking practices that affect society and the environment.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Ethical banking refers to a banking system that takes into consideration the impact of its practices on society and the environment. It aims to promote sustainable and responsible financial activities. Therefore, it is logical to conclude that ethical banking should indeed prioritize the consciousness of banking practices that affect society and the environment. Hence, the given answer "True" is correct.

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  • 8. 

    Which term describes the situation where a financial institution is so large that it fails, it will impact the whole economy negatively and bring about the failure of the economic system?

    • Too small to accused

    • Too small to fail

    • Too big to fail

    • Too big to succeed

    Correct Answer
    A. Too big to fail
    Explanation
    The term "Too big to fail" describes the situation where a financial institution is so large that if it were to fail, it would have a negative impact on the entire economy and potentially lead to the failure of the economic system. This concept suggests that certain institutions are considered too important and interconnected to be allowed to fail, and therefore, they may receive government support or bailouts to prevent their collapse.

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  • 9. 

    "Thou shall nots" are seen as

    • Negative ethics

    • Normative ethics

    • Positive ethics

    • The best way to deal with ethics as there are no conflicts

    Correct Answer
    A. Negative ethics
    Explanation
    "Thou shall nots" are seen as negative ethics because they focus on prohibiting certain actions or behaviors. This approach emphasizes what should not be done, rather than promoting positive actions or behaviors. Negative ethics typically involve setting boundaries and restrictions to prevent unethical behavior, but they may not provide clear guidance on what should be done in ethical dilemmas.

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  • 10. 

    Which of the video speakers in the helpified tool-set focuses more on the legal reasons for being ethical?

    • Dr. Julius Coles

    • Frank Buccaro (importance of Ethics in Business)

    • Dr. Freeman of the Darden school

    • Michael Jensen

    Correct Answer
    A. Dr. Julius Coles
    Explanation
    Dr. Julius Coles is the video speaker in the helpified tool-set who focuses more on the legal reasons for being ethical.

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Quiz Review Timeline (Updated): Aug 31, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Aug 31, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Sep 09, 2013
    Quiz Created by
    Jim.mahar
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