You are concerned about one of the assets in your diversified portfolio.  You just have an uneasy feeling about the CFO of that particular firm.  You do believe however that the firm makes a good product and that it is appropriately priced by the market.  Should you be concerned about the effect on your portfolio if the CFO embezzles a portion of the firm's cash?  Discuss based on diversification of assets in a portfolio. Further assume your friend is trying to decide to purchase stock from that same company.  She does not hold a diversified portfolio like you do.  Based on the relationship between risk and return, will you be willing to pay a higher price for the stock than her?  Explain

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Corporate Ethics

Ethics refers to the moral values and principles that guide an individual. Corporate ethics refers to the moral behavior of a company and its employees while conducting business. Business ethics is another name for corporate ethics. Business ethics reflects the purpose of doing the business. Business ethics is the distinction between what is right and wrong in the workplace and the selection of the right set of actions. Every corporate entity follows business ethics to a large extent in order to survive and compete successfully in the market. Corporate entities that strictly adhere to business ethics gain the trust of their stakeholders and thus gain more customers. An organization follows compliance, i.e., following certain business policies, rules, procedures, and practices to deal with the problem arising from the business environment. Business ethics also ensures that they meet compliance requirements as it was connected with the activities of an organization.