What federal agency was established to regulate the stock markets?

Study for the Praxis II Business Education – Content Knowledge (5101) Test. Enhance your business acumen with flashcards and multiple choice questions. Each question includes detailed hints and explanations to ensure thorough understanding. Prepare effectively for your exam!

The federal agency established to regulate the stock markets is the Securities and Exchange Commission (SEC). This agency was created in 1934 in response to the stock market crash of 1929 and the subsequent Great Depression. The primary role of the SEC is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

The SEC oversees the securities industry, including stock exchanges and securities firms, ensuring that public companies provide accurate and timely information to investors. This regulation is crucial for maintaining investor confidence and ensuring that the markets operate fairly. The agency also enforces securities laws designed to prevent fraud and manipulation in the securities markets.

In contrast, the other options focus on different areas of public safety and discrimination. The Consumer Product Safety Commission oversees the safety of consumer products; OSHA focuses on workplace safety and health; and the Equal Employment Opportunity Commission deals with discrimination in the workplace. Each of these agencies has distinct responsibilities that do not pertain to the regulation of financial markets.

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