Which of the Following Actions Would Be Considered Unethical

question 81

Multiple Choice

Which of the following actions would be considered unethical?

• A)The CEO puts a favorable "spin" on the year's operating results in the Letter to the Stockholders in the annual report.
• B)A company presents three years' results on the income statement to highlight a positive trend in earnings.
• C)The external auditors present their findings to management before the annual report is published.
• D)A company anticipates customers' needs by shipping them product before they order it,and records the related sales.

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Definitions:

Optimal Asset Allocation

The mix of different asset classes that maximizes return for a specific level of risk tolerance.

Security Selection

The process of choosing individual securities for investment with the goal of achieving the best possible return while managing risk.

Personal Trusts

Legal arrangements where assets are managed by one party for the benefit of another, often used for estate planning and wealth management.

Risk Averse

An investor who will consider risky portfolios only if they provide compensation for risk via a risk premium.