Financial Risk Manager Part 2
Get started today
Ultimate access to all questions.
Comments
Loading comments...
Ultimate access to all questions.
A consultant is reviewing the disclosures hedge funds are required to file with the US Security and Exchange Commission. The consultant highlights how investors can use these disclosures to identify and manage fraud risk. Which of the following statements is correct?
A
Disclosures of past regulatory or legal violations are not effective in predicting fraud because circumstances almost always change.
B
There is not enough evidence to conclude that investors of hedge funds are compensated for fraud risk by receiving higher returns.
C
Regulatory and legal prohibitions prevent fraud, and insufficient requirements on disclosure of violations cause fraud.
D
Regulatory and legal violation disclosures benefit only a small fraction of investors who have access to high-cost contemporaneous data.