13
QuizMultiple Choice

Investing and Financial Markets — Unit test

Question 13 • Personal Finance - EL3403

Who is following the law when it comes to protecting investors’ funds?

Answer
A
a financial planner who pitches a risk-free stock
B
a mutual fund advisor who informs investors about risks
C
a broker who sells CDs from nonfinancial institutions
D
a realtor who advertises a can’t-miss land buy

Explanation

Investment professionals must give investors accurate information about the risks of an investment. A mutual fund advisor who informs investors about risks is following that duty. Calling a stock “risk-free” or a land purchase “can’t-miss” can mislead investors, and selling CDs from nonfinancial institutions can involve products that lack the protections investors might expect.

AI-written and checked against the verified answer.

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