Chapter 1 Review

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=90 BGCOLOR="#006699" TEXT="#080000" bgproperties="fixed" background="122285a1erlcgo.gif"> <div> <FONT SIZE="5" COLOR="#FFCC66" FACE="Arial" ><B>Agent Ethics</B></FONT><B>     |     </B><A HREF="index.htm" TARGET="_top" TITLE="Agent Ethics"><U><B>home</B></U></A><B>       </B><A HREF="id15.htm" TARGET="_top" TITLE="TABLE OF CONTENTS"><U>TABLE OF CONTENTS</U></A>   |   <A HREF="id54.htm" TARGET="_top" TITLE="GLOSSARY"><U>GLOSSARY</U></A>   |   <A HREF="id67.htm" TARGET="_top" TITLE="Print Version"><U>Print Version</U></A>   |   <A HREF="id56.htm" TARGET="_top" TITLE="Review Questions"><U>Review Questions</U></A>   |   <A HREF="id55.htm" TARGET="_top" TITLE="FINAL EXAMINATION"><U>FINAL EXAMINATION</U></A></div> <div> back to  <A HREF="id2.htm" TARGET="_top" TITLE="Chapter 1 "><U><B>Chapter 1  </B></U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=210 BGCOLOR="#FFCC66" TEXT="#080000" background="121d2c00dkelyh.gif"> <div> <A HREF="mailto:instructor@wallstreetinstructors.com" TARGET="_top" TITLE="mailto:instructor@wallstreetinstructors."><U><IMG SRC="12caf630.gif" border=0 width="175" height="99" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></U></A></div> <div> <TABLE BORDER="2" CELLPADDING="2" CELLSPACING="1" WIDTH="83" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 16 ><NOBR><div> <A HREF="mailto:instructor@wallstreetinstructors.com" TARGET="_top" TITLE="mailto:instructor@wallstreetinstructors."><U>Instructor</U></A></div> </NOBR></tD> </tR> </TABLE></div> <bR> <div> <A HREF="id17.htm" TARGET="_top" TITLE="Foundation of Ethics"><U>Foundation of Ethics</U></A></div> <div> <A HREF="id18.htm" TARGET="_top" TITLE="Nature of Compliance"><U>Nature of Compliance</U></A></div> <div> <A HREF="id19.htm" TARGET="_top" TITLE="Professionalism and Industry Image"><U>Professionalism and Industry Image</U></A></div> <div> <B>Chapter 1 Review</B></div> <bR> </td> <td valign="top" height=390 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <B>Chapter 1 Review</B></div> <bR> <bR> <div> To summarize the role of ethics and compliance in the financial services transaction:  </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.gif" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">It is a body of rules of conduct that promote the interests of all parties to the transaction;</div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.gif" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Although distinct from ethics, compliance has its foundation in an ethical system;</div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.gif" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The rules of compliance provide minimum conduct requirements while ethics provides optimum guidelines;</div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.gif" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The rules of both ethics and compliance apply to the sales tools and practices of the agent;</div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.gif" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Ethics extends to interaction with the client or prospect and with the company or companies that are represented; and</div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.gif" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Changing the public image of the financial practitioner to one of a professional requires, among other things, adherence to a code of professional conduct;</div> <bR> <div> Although professional status carries with it a cost in increased liability for life insurance agents, it may also help ensure the continuation of the agency distribution system.</div> <bR> <bR> <bR> <div> <B>Review Questions</B></div> <bR> <div> <A HREF="id17_golden_rule.htm" TARGET="_top" TITLE="Foundation of Ethics"><U>Which of the following is the foundation of ethics for the financial services practitioner?</U></A></div> <bR> <div> <B>The Golden Rule</B></div> <div> The legal system</div> <div> Force</div> <div> Compliance requirements</div> <bR> <div> <A HREF="id17_limited_resourses.htm" TARGET="_top" TITLE="Foundation of Ethics"><U>What makes a system of ethics essential?</U></A></div> <bR> <div> A limited supply of goods</div> <div> <B>Because individuals exist in society</B></div> <div> Its fairness</div> <div> It is the only method to adjudicate disputes</div> <bR> <div> <A HREF="id17_force_v_reason.htm" TARGET="_top" TITLE="Foundation of Ethics"><U>The following is a fundamental method of resolving disputes.</U></A></div> <bR> <div> Reason</div> <div> Force</div> <div> <B>Both a and b</B></div> <div> Neither a nor b</div> <bR> <bR> <div> <A HREF="id19_common_thread_on_unethical_acts.htm" TARGET="_top" TITLE="Professionalism and Industry Image"><U>What is the common thread in unethical sales practices?</U></A></div> <bR> <div> The practices were illegal</div> <div> <B>They misled the customer</B></div> <div> They led to the customer’s monetary loss</div> <div> They were forbidden by all insurers</div> <bR> <bR> <div> <A HREF="id19_professionalism.htm" TARGET="_top" TITLE="Professionalism and Industry Image"><U>Which of the following is NOT a necessary component of a profession?</U></A></div> <bR> <div> Specialized knowledge</div> <div> “Service before income” outlook</div> <div> <B>Opportunity for substantial income</B></div> <div> A code of professional ethics</div> <bR> <bR> <bR> <bR> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="97" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" BGCOLOR=#FFCC66 > <tR> <tD VALIGN=CENTER HEIGHT= 38 WIDTH="87"><div> <A HREF="id3.htm" TARGET="_top" TITLE="Chapter 2"><U><B><U>NEXT</U></B></U></A></div> </tD> </tR> </TABLE></div> <bR> </td> </tr></table></body>