Which of the following is true of financial institutions?
A)Financial institutions are the regulators of interest rates and other returns in financial markets.
B)Managers of financial institutions should have an understanding of factors that cause interest rates and other returns in the financial markets to rise and fall.
C)Financial institutions are accountable and responsible in reporting financial information for publicly-traded corporations.
D)Financial institutions are required by the Sarbanes-Oxley Act to disclose the environment-friendly measures taken by investment corporations.
E)Financial institutions require public corporations to adopt socially responsible work practices.

Question

Quizplus · Accepted Answer

Managers of financial institutions should have a thorough understanding of factors causing interest rates and other returns in the financial markets to rise and fall. This helps them make informed decisions about investments, lending, and other financial activities. Option A is incorrect because financial institutions are not regulators but rather are subject to regulation by regulatory authorities. Option C is incorrect because financial institutions are not responsible for reporting financial information of publicly-traded corporations; this responsibility lies with the corporations themselves. Option D is incorrect because Sarbanes-Oxley Act requires corporations to disclose financial information accurately and transparently and does not pertain to environmental measures. Option E is incorrect because financial institutions may incorporate clauses related to social responsibility into their lending practices, but this is not a requirement.

Which of the Following Is True of Financial Institutions