What are the two key markers in determining whether a security action aligns with correct financial practices?

The identification of transparency and compliance as key markers in determining whether a security action aligns with correct financial practices is rooted in the fundamental principles of financial regulation and ethical conduct in the investment industry. Transparency refers to the clear, open, and honest disclosure of all relevant financial information that could affect investors' decisions. This includes the disclosure of risks, fees, performance, and any conflicts of interest that may exist. When a security action is transparent, investors can make informed decisions based on thorough and accurate information.

Compliance, on the other hand, pertains to adherence to the laws, regulations, and standards set forth by governing bodies. Compliance ensures that firms operate within the legal framework and maintain a level of ethical standards, safeguarding investors' interests. When both transparency and compliance are prioritized, it instills confidence in the financial markets and helps prevent fraud, misrepresentation, and other unethical practices that could harm investors or destabilize the market.

While other options mention important financial concepts like profitability, liquidity, or returns, these do not inherently guarantee that practices are ethical or regulatory compliant. They are performance indicators that may reflect an organization's operational health but do not alone address the broader aspects of ethical conduct and regulatory adherence that are crucial in assessing security actions.