Session 13: Market Organization, Market Indices, and Market Efficiency
Reading 55: Market Organization and Structure
LOS l: Describe the objectives of market regulation.
An objective of financial market regulation is to:
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A) |
reduce information gathering costs by requiring common financial reporting standards. | |
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B) |
ensure that inside information is made public in a timely manner. | |
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C) |
prevent uninformed investors from participating in financial markets. | |
One of the objectives of market regulation is to require firms to report their financial performance according to a single set of standards, such as those of the IASB or FASB, thereby reducing market participants’ cost of gathering information. Market regulation is not designed to prevent uninformed investors from trading, but to protect unsophisticated investors and thereby preserve trust in the financial markets. An objective of market regulation is to prevent those with non-public information from profiting at the expense of other investors, but not necessarily to make all inside information public. | 
发表于 2011-3-29 16:17
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