An Investment Consultant Is Recommending a Certain Class of Mutual

question 154

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 unethical practice not to also recommend a class of mutual funds with an exceptionally high probability of loss.

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Definitions:

Fiduciary

As a noun, a person having a duty created by his or her undertaking to act primarily for another’s benefit in matters connected with the undertaking. As an adjective, a relationship founded on trust and confidence.

Corporate Office

The main or headquarters location of a company where key managerial and executive activities are conducted.

Shareholders Consent

The approval or agreement of shareholders, often required for significant corporate actions.

Self-Dealing

occurs when a person in a fiduciary position acts for their own benefit rather than for the benefit of the beneficiaries.