| Yes |
No
【单选】In order to maintain compliance with CFA Institute Standards of Professional Conduct, is it appropriate for Harrison to accept, or is he required to reject, the offers of appreciation from BTB and WTI, assuming Ironclad consents to both?
A. B.
C.
| Reject |
Accept
【单选】Is it likely that Myers violated any CFA Institute Standards of Professional Conduct by selling the Breakthrough stock for her clients’ accounts?
A. No, because she first made her supervisor aware of the information upon which the trade was based and received approval for the trade.
B. Yes.
C. No, because she fulfilled her fiduciary duty to her clients by avoiding significant losses.
【单选】Is it likely that Myers violated any CFA Institute Standards of Professional Conduct with respect to her disclosure of the partnership interest in the software company or did Harrison violate any standards with respect to the sale of Breakthrough stock?
A. B.
C.
| Yes |
Yes
【单选】Is it most likely that Fleming violated any CFA Institute Standards of Professional Conduct related to his meeting with the CIO of the Crockett Foundation?
A. No—he does not have a duty to maintain client records, only his employer does.
B. Yes—he failed to maintain appropriate records to support his investment recommendation.
C. No—he maintained an IPS and followed established procedures in maintaining client records and data.
【单选】According to CFA Institute Standards of Professional Conduct, did Fleming’s conversation with the CIO of the Crockett Foundation or his decision to sell GlobalBank’s position in DCH stock most likely violate Standard II(B)—Market Manipulation?
A. B.
C.
| Yes |
Yes
【单选】According to CFA Institute Standards of Professional Conduct, which of the following of Fleming’s actions is most likely a violation of Standard I(C)—Misrepresentation? Fleming:
A. executes the trades on DCH Corp. per Waverly’s instructions without first referring to Waverly’s IPS.
B. tells the CIO of Crocket Foundation that shares of DCH’s IPO outperformed the S&P 500 by at least 15% in each of the last three years since the offering.
C. tells the CIO of the Crockett Foundation that DCH’s secondary offering will earn at least the lowest return earned on its IPO shares over the last three years.
【单选】According to the CFA Institute’s Standards of Professional Conduct, Fleming’s execution of Waverly’s trade order after confirming the appropriateness of the trade is most likely in violation of:
A. Standard V(A)—Diligence and Reasonable Basis for not exercising diligence and thoroughness in his analysis of the investment and Standard III(C)—Suitability for recommending an investment before determining if the investment was appropriate for the client.
B. Standard V(B)—Communication with Clients and Prospective Clients for not separating fact from opinion, but is not in violation of Standard I(C)—Misrepresentation because his guarantee of future investment performance was not a written representation.
C. Standard I(C)—Misrepresentation for not disclosing to Waverly that he did not read the marketing materials, but is not in violation of Standard III(C)—Suitability because the client analyzed the investment thoroughly.
【单选】After determining Durand’s risk and return objectives, liquidity needs, tax considerations, and unique circumstances, Smyth has decided that he must reduce Durand’s holdings of Comax shares. He has several other clients, whom he met through Muller, who also have significant holdings in Comax. Smyth has also decided to reduce his own holdings in Comax since his term as a director of Comax will be up in June. He does not plan to seek reappointment but as a member of the audit committee he is privy to information about a tender offer. Smyth realizes this is a complex situation.
Of the following Standards, determine which would least likely help Smyth decide what actions with respect to selling shares of Comax would be in compliance with the CFA Institute Standards of Practice.
A. Standard III(B), Fair Dealing.
B. Standard III(C), Suitability.
C. Standard VI(A), Disclosure of Conflicts.
【单选】Smyth would like to continue to direct brokerage from Durand’s portfolio to Smyth’s sister’s brokerage firm. In order to continue the arrangement and comply with the CFA Institute Soft Dollar Standards, which of the following disclosures are required (and not simply recommended)? Smyth is required to disclose:
A. SIA’s policies with respect to all Soft Dollar Arrangements.
B. that his duty as the investment manager is to continue to seek to obtain best execution.
C. that directed brokerage arrangements that require the investment manager to commit a certain percentage of brokerage might affect his ability to seek to obtain best execution.
【单选】Which of the following best describes Smyth’s compliance with the CFA Institute Soft Dollar Standards in his use of client brokerage?
A. Purchase of research reports and attending the conference are allowable uses of client brokerage.
B. Purchase of both research reports and carpeting are allowable uses of client brokerage.
C. Purchase of research reports is an allowable use of client brokerage.
【单选】
Ken James has been an independent financial advisor for 15 years. He received his CFA Charter in 1993, but did not feel it helped his business, so he let his dues lapse this year. He still has several hundred business cards with the CFA designation printed on them. His promotional materials state that he received his CFA designation in 1993. James:
A. can continue to use the existing promotional materials, and can use the cards until his supply runs out—his new cards cannot have the designation.
B. must cease distributing the cards with the CFA designation and the existing promotional materials.
C. must cease distributing the cards with the CFA designation, but can continue to use the existing promotional materials.
【单选】
Steve Wynn, CFA, is an investment advisor and Jennifer Carey has been a client of his for three years. Carey has shown an interest in international stocks, so they agree to consider putting a portion of Carey's portfolio in foreign stocks. Wynn makes sure that Carey is aware of the currency and political risks inherent in foreign investing before proceeding. They jointly agree to purchase a small portfolio of stocks in the country of Bellagio because one of the brokerage houses that Wynn uses has a great deal of fundamental research on companies domiciled there. Six months later it is revealed in the news media that Bellagio has had severe insider trading problems which have contributed to the loss on the portfolio. Wynn has:
A. violated the Standards by not informing Carey about the insider trading risks and contributing to the problem of insider trading.
B. violated the Standards by not informing Carey about the insider trading risks, but not by contributing to the problem of insider trading.
C. not violated the Standards.
【单选】
Susan Nielsen, CFA, works for a rating agency which competes directly with S&P and Moody’s. Her friend, Lance Parker, works for the same company but in a different department which is involved in advisory services for structured products. Nielsen frequently receives pressure from Parker to "put a positive face" on client ratings to help him sell advisory services. She is reluctant to discuss client ratings with Parker and tries to avoid the topic. She consults her company’s compliance department and learns that there are no policies or procedures to discourage Nielsen and Parker from sharing information and is encouraged to consider his advice on company ratings. Nielsen should most likely:
A. continue to consult with Parker on company ratings as the compliance department’s position is that there is no conflict.
B. advise regulators of the potential conflict of interest and seek legal counsel.
C. advise her firm to develop firewalls and protections to allow the different departments to function independently and avoid talking with Parker about client ratings.
【单选】
After a very successful quarter of high investment returns, Judy O’Berry, CFA, receives several gifts from grateful clients. O’Berry considers the gifts to be of novelty or sentimental value only, but she hears rumors that several junior employees are jealous of the attention she received for the group’s efforts. She decides to consult the company’s compliance rules on gifts and is surprised to learn her firm has no established rules. She consults the Standards of Practice Handbook, and then submits proposed rules on gifts to her company’s compliance department. These rules should contain all of the following EXCEPT:
A. a formal value limit based on local customs.
B. restrictions on all types business entertainment.
C. a requirement to disclose the gift.
【单选】As to the process by which Brown's report in Exhibit B came into being, which of the following is NOT a procedural error in violation of CFA Institute Standards of Professional Conduct?
A. Brown has violated the Standard relating to independence and objectivity.
B. Brown has violated the Standard relating to the prohibition against plagiarism.
C. Brown has violated the Standard relating to disclosure of basic characteristics.
【单选】The research report, as shown, has several aspects which violate CFA Institute Standards of Professional Conduct. Which of the following is NOT an apparent violation of CFA Institute Standards?
A. The report violates guidelines on investment performance presentation.
B. The report does not adequately discuss the factors important to analysis, recommendations, or action.
C. The report does not distinguish between fact and opinion.
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