U.S. securities firms recently agreed to pay a record amount of $1.4 billion in settlement charges brought by government regulators. Regulators claimed that firms had abused investors during the market boom of the 1990s. Abuses included analysts
tailoring their research reports and ratings on the stocks they covered in order to win more business for their firm. If this settlement causes Wall Street firms to comply with the letter of the law but they violate the spirit of the law, the firms are engaging in
A) elimination of conflicts of interest.
B) creative response.
C) the capture hypothesis.
D) deregulation.
Answer: B
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Because wealth is more concentrated than income, the Gini coefficient for the wealth distribution is greater than the Gini coefficient for the income distribution.
Answer the following statement true (T) or false (F)
Over the past decade technological improvements that have lowered the cost of producing an automobile have increased
A) both the supply and the demand for automobiles. B) the supply but not the demand for automobiles. C) the demand but not the supply of automobiles. D) neither the supply nor the demand for automobiles.
Large commercial banks are considered to be market makers because:
A) without them, there would be no foreign exchange market B) they can easily manipulate the value of currencies in the foreign exchange market C) they are willing to buy and sell major currencies at any time D) they created the foreign exchange market
Which of the following provides the best example of a public good?
a. elementary and secondary education b. residential trash pickups provided by a local government c. an unscrambled television signal d. the medical services provided by a local hospital