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  • You are a financial advisor, and a potential client is considering investing in a startup company.

You are a financial advisor, and a potential client is considering investing in a startup company. The client has limited knowledge about the startup's financial health. You have access to confidential information about the startup's financial status. What should you do in this situation to address information asymmetry?

Option: 1

Share all the confidential financial information with the client to ensure transparency.


Option: 2

Share only the positive aspects of the startup's financials to attract the client.


Option: 3

Disclose that you have access to additional information but can only provide public information to the client


Option: 4

Advise the client to invest without mentioning the information asymmetry.


Answers (1)

best_answer

It is the most ethical and appropriate choice in this situation. It acknowledges the information asymmetry without violating any confidentiality agreements or ethical standards. By disclosing the limitation on the information you can provide, you maintain transparency with the client and ensure that they make an informed decision based on publicly available information. hence option c is correct

Posted by

Sayak

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