n NISM Certifications
X NISM Series X
Medium

Is it ethical for an investment adviser to analyze and select execution platforms for clients, and why?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Yes, as it adds value beyond advice

  2. B

    Yes, if they have their own platform and do not insist on its use

  3. C

    No, because it shifts responsibility

  4. No, regulations prohibit involvement in execution

    Correct answer

Why this is the answer

Regulations restrict advisers from participating in execution activities to maintain independence and prevent conflicts of interest.

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