An investment consultant is recommending a certain class of mutual funds to clients based on its exceptionally high probability of gain. It is an ethical practice to explain to clients what the basis of her probability estimate is.

Question

Quizplus · Accepted Answer

It is an ethical practice to explain the basis of the probability estimate to clients, as this helps to ensure transparency and allows clients to make informed decisions about their investments. Failing to provide such information would be seen as unethical, as it could mislead clients and potentially result in them making investment decisions that do not align with their goals or risk tolerance.

An Investment Consultant Is Recommending a Certain Class of Mutual