Canadian Securities Course (CSC) Practice Exam · Question
What is the primary concern when an advisor recommends purchasing investments from a company in which they hold a significant personal interest, without disclosing this to the client?
A conflict of interest arises when an advisor's personal interests could potentially influence their recommendations or actions, leading to a disadvantage for t
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Question: What is the primary concern when an advisor recommends purchasing investments from a company in which they hold a significant personal interest, without disclosing this to the client?
Answer options: ✅ Conflict of interest
- Lack of diversification
- Underperformance risk
- Liquidity risk
Correct answer: Conflict of interest
Explanation: A conflict of interest arises when an advisor's personal interests could potentially influence their recommendations or actions, leading to a disadvantage for the client. Disclosure is key.
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