The Incentive for Analysts in Investment Banks to Distort Research

question 27

Multiple Choice

The incentive for analysts in investment banks to distort research increases when

• A)revenues from brokerage commissions increase.
• B)the potential revenues from underwriting greatly exceed brokerage commissions.
• C)the potential brokerage commissions greatly exceed revenues from underwriting.
• D)revenues from underwriting decrease.

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Definitions:

Price

The expense value envisioned, mandated, or spent in return for something.

Good Bought

Refers to any product or service that has been purchased by consumers.

Wage

The fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.

Grape Pickers

Workers who manually or mechanically harvest grapes from vineyards.