Question:

Which of the following statements concerning the objectives of market regulation is least accurate? 
Regulators: 
A. set standards to ensure that all agents acting in the market are skilled. 
B. ensure systems are in place to prevent fraud. 
C. promote fair and orderly markets. 
 

Answer = A 
Regulators help solve agency problems by setting minimum standards of competence, not skill, for  agents and by defining and enforcing minimum standards of practice. 

CFA Level I 
"Market Organization and Structure," Larry Harris 
Section 10

 

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