Question #10 - Reading 7 Economics of Regulation

Reading: Reading 7 Economics of Regulation

PDF File: Reading 7 Economics of Regulation.pdf

Page: 5

Status: Unattempted

Correct Answer: A

Shared Context

- If Wiggins is correct about the government motivation for Proposal 14a.3 in Exhibit 1, then this is most likely an example of: A) regulatory competition. B) regulatory capture. C) regulatory arbitrage.

Question

The disclosure rules being implemented in Proposal 18d.5 most likely suggest that:

Answer Choices:

A. regulations have historically focused on institutional investors

B. regulations have historically focused on retail investors

C. regulations have historically taken a buyer beware approach for retail investors

Explanation

Hedge funds and private equity funds are the domain of institutional and sophisticated investors not retail. The previous lack of disclosure requirements suggest a focus on retail investing and a buyer beware approach for more sophisticated investors.

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