An Investment Consultant Is Recommending a Certain Class of Mutual

question 157

True/False

An investment consultant is recommending a certain class of mutual funds to the clienteles based on its exceptionally high probability of gain.It is an ethical practice to explain to the clienteles what the basis of her probability estimate is.

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Definitions:

Imprisonment

The state of being confined in prison as a punishment for crimes committed.

Monopoly Power

The ability of a single company or entity to control or dominate an industry or sector, reducing competition.

Market Share

The portion of a market controlled by a particular company or product.

Tying Arrangements

Business practices where the seller conditions the sale of one product (the "tying" product) on the buyer's agreement to purchase a second, distinct product (the "tied" product).