Investment Banks Are Guilty of Conflict of Interest When They

question 98

Multiple Choice

Investment banks are guilty of conflict of interest when they

• A) pressure their analysts to produce research favorable to their client firms.
• B) permit executives of client firms to alter analysts' research on their firms.
• C) prohibit analysts from making negative or controversial comments about client firms.
• D) all of the above.

---

Definitions:

ROA

Return on Assets, a financial ratio that indicates how profitable a company is relative to its total assets.

Debt/Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level or profits.

Interest Rate

The cost, represented as a percentage of the principal, incurred by a borrower for the utilization of assets from a lender.