Evaluate the following statement.The guiding idea behind the regulation of financial markets in the United States is to protect individual investors from themselves.
Labels: Exam 2 Question 5
posted by Eschenfelder at 8:20 AM
Money and Banking Spring 2006
The following posts are the questions which appeared on last semester's exams. Students should use the comment sections to answer the questions and respond to the posts of other students.
Thursday, February 22, 2007
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Contributors
2 Comments:
I disagree with the statement. The guiding idea behind the regulation of financial markets in the United States is to protect individuals from others in the market. This is done through disclosure of information. Financial market regulation cannot protect individuals from themselves and their own potentially risky behavior.
The guiding idea behind the regulations of financial markets is to protect individual investors from others and the philosophy that the best protection is through information. This does not mean that individual investors are restricted from making stupid financial decisions. The regulation of financial markets does not protect individual investors from making stupid decisions, but the regulation forces companies to disclose any factual information that may help an investor make a decision. It is up to the investor whether or not they buy the stock.
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