Question

1. The excessive or inappropriate trading for a client's account by a broker who has control over the account with the intent to generate commissions rather that benefit the client is called

   		suitability
   		churning
   		redlining
   		suspending

QUESTION 2

1. Financial markets DO NOT presuppose any moral rules and/or exceptions of moral behavior

   		True
   		False

QUESTION 3

1. The main aim of financial market regulation is to ensure ______________.

   		profits
   		sustainability
   		efficiency
   		longevity

QUESTION 4

1. What prompted the first securities legislation?

   		the stock market crash of 1929
   		World War II
   		the Civil Rights Movement
   		the Great Recession in 2008

QUESTION 5

1. One of the main purposes of securities regulation is to prevent fraudulent and manipulative practices.

   		True
   		False

QUESTION 6

1. According to the text, which of the following is NOT a factor that can lead to unequal bargaining power?

   		resources
   		unequal wealth
   		processing ability
   		vulnerabilities

QUESTION 7

1. A fundamental market principle is that prices of securities need not be connected in any way to their underlying value.

   		True
   		False

QUESTION 8

1. ___________ is commonly defined as trading in the stock of publicly held corporations on the basis of material, non-public information.

   		insider trading
   		backroom dealing
   		collective bargaining
   		efficient pricing

QUESTION 9

1. Fairness in the stock market REQUIRES that all traders have the same information.

   		True
   		False

QUESTION 10

1. Economic arguments about market efficiency look only at the cost of registering information in the market and not at possible adverse consequences of legalized insider trading.

   		True
   		False

Answer 1

1.

Churning

Explanation:

Churning of portfolio means loss in commissions due to excessive trading of account

2.

True

Explanation:

Markets do not take into consideration moral behaviors.

3.

efficiency

Explanation:

Main motto of the financial market is efficiency where all the information is effectively reflected into prices

4.

The stock market crash of 1929

Explanation:

Stock market crash of 1929 prompted the need of regulation in the financial markets.

5.

True

Explanation:

Main purpose of financial market regulation is stopping fraudlent and manipulative activities.