Concern about potential abuses of fiduciary responsibility has been used to justify product segmentation on the grounds of
A)safety and soundness issues.
B)economy of scale and scope issues.
C)conflict of interest issues.
D)deposit insurance issues.

Question

Quizplus · Accepted Answer

Fiduciary responsibility refers to the legal and ethical obligation of a person or entity to act in the best interests of another party. Product segmentation, or separating different types of financial products or services, may be used to mitigate conflicts of interest between the fiduciary and the client. Therefore, choice C of conflict of interest issues is the best choice. Safety and soundness issues relate to the financial stability of institutions, while economy of scale and scope issues relate to cost efficiency and competitiveness. Deposit insurance issues are related to protecting consumers' deposits in case a financial institution fails, and are not directly related to fiduciary responsibilities.

Concern About Potential Abuses of Fiduciary Responsibility Has Been Used