课后作业
-
Which is an example of an activity that may be legal but that CFA Institute considers unethical?
AMaking legally required disclosures in marketing materials
BTrading while in possession of material nonpublic information
CDisclosure by an employee of his or her own company’s dishonest activity
-
Which of the following statements clearly conflicts with the recommended procedures for compliance presented in the CFA Institute Standards of Practice Handbook?
AFirms should disclose to clients the personal investing policies and procedures established for their employees.
BPrior approval must be obtained for the personal investment transactions of all employees.
CFor confidentiality reasons, personal transactions and holdings should not be reported to employers unless mandated by regulatory organizations.
-
Bronson provides investment advice to the board of trustees of a private university endowment fund. The trustees have provided Bronson with the fund’s financial information, including planned expenditures. Bronson receives a phone call on Friday afternoon from Murdock, a prominent alumnus, requesting that Bronson fax him comprehensive financial information about the fund. According to Murdock, he has a potential contributor but needs the information that day to close the deal and cannot contact any of the trustees. Based on the CFA Institute Standards, Bronson should:
ASend Murdock the information because disclosure would benefit the client.
BNot send Murdock the information to preserve confidentiality.
CSend Murdock the information, provided Bronson promptly notifies the trustees.
-
Willier is the research analyst responsible for following Company X. All the information he has accumulated and documented suggests that the outlook for the company’s new products is poor, so the stock should be rated a weak “hold.” During lunch, however, Willier overhears a financial analyst from another firm whom he respects offer opinions that conflict with Willier’s forecasts and expectations. Upon returning to his office, Willier releases a strong “buy” recommendation to the public. Willier:
AViolated the Standards by failing to distinguish between facts and opinions in his recommendation.
BViolated the Standards because he did not have a reasonable and adequate basis for his recommendation.
CWas in full compliance with the Standards.
-
Which one of the following actions will help to ensure the fair treatment of brokerage firm clients when a new investment recommendation is made?
AInforming all people in the firm in advance that a recommendation is to be disseminated.
BDistributing recommendations to institutional clients prior to individual accounts.
CMinimizing the time between the decision and the dissemination of a recommendation.
-
Jurgen is a portfolio manager. One of her firm’s clients has told Jurgen that he will compensate her beyond the compensation provided by her firm on the basis of the capital appreciation of his portfolio each year. Jurgen should:
ATurn down the additional compensation because it will result in conflicts with the interests of other clients’ accounts.
BTurn down the additional compensation because it will create undue pressure on her to achieve strong short-term performance.
CObtain permission from her employer prior to accepting the compensation arrangement.
-
One of the discretionary accounts managed by Farnsworth is the Jones Corporation employee profit-sharing plan. Jones, the company president, recently asked Farnsworth to vote the shares in the profit-sharing plan in favor of the slate of directors nominated by Jones Corporation and against the directors sponsored by a dissident stockholder group. Farnsworth does not want to lose this account because he directs all the account’s trades to a brokerage firm that provides Farnsworth with useful information about tax-free investments. Although this information is not of value in managing the Jones Corporation account, it does help in managing several other accounts. The brokerage firm providing this information also offers the lowest commissions for trades and provides best execution. Farnsworth investigates the director issue, concludes that the management-nominated slate is better for the long-run performance of the company than the dissident group’s slate, and votes accordingly. Farnsworth:
AViolated the Standards in voting the shares in the manner requested by Jones but not in directing trades to the brokerage firm.
BDid not violate the Standards in voting the shares in the manner requested by Jones or in directing trades to the brokerage firm.
CViolated the Standards in directing trades to the brokerage firm but not in voting the shares as requested by Jones.
-
Grey recommends the purchase of a mutual fund that invests solely in long-term US Treasury bonds. He makes the following statements to his clients: “The payment of the bonds is guaranteed by the US government; therefore, the default risk of the bonds is virtually zero.” “If you invest in the mutual fund, you will earn a 10% rate of return each year for the next several years based on historical performance of the market.” Did Grey’s statements violate the CFA Institute Code and Standards?
ANeither statement violated the Code and Standards.
BOnly statement I violated the Code and Standards.
COnly statement II violated the Code and Standards.
-
Ward is scheduled to visit the corporate headquarters of Evans Industries. Ward expects to use the information he obtains there to complete his research report on Evans stock. Ward learns that Evans plans to pay all of Ward’s expenses for the trip, including costs of meals, hotel room, and air transportation. Which of the following actions would be the best course for Ward to take under the Code and Standards?
AAccept the expense-paid trip and write an objective report.
BPay for all travel expenses, including costs of meals and incidental items.
CAccept the expense-paid trip but disclose the value of the services accepted in the report.
-
Which of the following statements is a stated purpose of disclosure in Standard VI(C)–Referral Fees?
ADisclosure will allow the client to request discounted service fees.
BDisclosure will help the client evaluate any possible partiality shown in the recommendation of services.
CDisclosure means advising a prospective client about the referral arrangement once a formal client relationship has been established.
-
Rule has worked as a portfolio manager for a large investment management firm for the past 10 years. Rule earned his CFA charter last year and has decided to open his own investment management firm. After leaving his current employer, Rule creates some marketing material for his new firm. He states in the material, “In earning the CFA charter, a highly regarded credential in the investment management industry, I further enhanced the portfolio management skills learned during my professional career. While completing the examination process in three consecutive years, I consistently received the highest possible scores on the topics of Ethics, Alternative Investments, and Portfolio Management.” Has Rule violated Standard VII(B)–Reference to CFA Institute, the CFA Designation, and the CFA Program in his marketing material?
ARule violated Standard VII(B) in stating that he completed the exams in three consecutive years.
BRule violated Standard VII(B) in stating that he received the highest scores in the topics of Ethics, Alternative Investments, and Portfolio Management.
CRule did not violate Standard VII(B).
-
Stafford is a portfolio manager for a specialized real estate mutual fund. Her firm clearly describes in the fund’s prospectus its soft dollar policies. Stafford decides that entering the CFA Program will enhance her investment decision-making skill and decides to use the fund’s soft dollar account to pay the registration and exam fees for the CFA Program. Which of the following statements is most likely correct?
AStafford did not violate the Code and Standards because the prospectus informed investors of the fund’s soft dollar policies.
BStafford violated the Code and Standards because improving her investment skills is not a reasonable use of the soft dollar account.
CStafford violated the Code and Standards because the CFA Program does not meet the definition of research allowed to be purchased with brokerage commissions.
-
Andrews, a private wealth manager, is conducting interviews for a new research analyst for his firm. One of the candidates is Wright, an analyst with a local investment bank. During the interview, while Wright is describing his analytical skills, he mentions a current merger in which his firm is acting as the adviser. Andrews has heard rumors of a possible merger between the two companies, but no releases have been made by the companies concerned. Which of the following actions by Andrews is least likely a violation of the Code and Standards?
AWaiting until the next day before trading on the information to allow time for it to become public.
BNotifying all investment managers in his firm of the new information so none of their clients are disadvantaged.
CPlacing the securities mentioned as part of the merger on the firm’s restricted trading list.
-
ABC Investment Management acquires a new, very large account with two concentrated positions. The firm’s current policy is to add new accounts for the purpose of performance calculation after the first full month of management. Cupp is responsible for calculating the firm’s performance returns. Before the end of the initial month, Cupp notices that one of the significant holdings of the new accounts is acquired by another company, causing the value of the investment to double. Because of this holding, Cupp decides to account for the new portfolio as of the date of transfer, thereby allowing ABC Investment to reap the positive impact of that month’s portfolio return.
ACupp did not violate the Code and Standards because the GIPS standards allow composites to be updated on the date of large external cash flows.
BCupp did not violate the Code and Standards because companies are allowed to determine when to incorporate new accounts into their composite calculation.
CCupp violated the Code and Standards because the inclusion of the new account produces an inaccurate calculation of the monthly results according to the firm’s stated policies.
-
Paper was recently terminated as one of a team of five managers of an equity fund. The fund had two value-focused managers and terminated one of them to reduce costs. In a letter sent to prospective employers, Paper presents, with written permission of the firm, the performance history of the fund to demonstrate his past success.
APaper did not violate the Code and Standards.
BPaper violated the Code and Standards by claiming the performance of the entire fund as his own.
CPaper violated the Code and Standards by including the historical results of his prior employer.
-
Which of the following requirements for members and candidates is one of the six components of the Code of Ethics?
AMaintain and improve their professional competence
BDo not act or cause others to act on material nonpublic information.
CDistinguish between fact and opinion when presenting investment analysis.
-
Which of the following statements most accurately describes the parties that GIPS are intended to apply to and serve? GIPS apply to:
Aconsultants who serve their existing and prospective clients
Bfirms that issue securities and serve investment management firms.
Cinvestment management firms and serve their existing and prospective Clients.
-
For a composite to be constructed in compliance with GIPS, the portfolios included in the composite must:
Ahave been managed by the firm for the full performance reporting period.
Bbe selected immediately after the last business day of the period for which the composite’s performance will be presented.
Cinclude all fee-paying, discretionary portfolios that are managed accordingto the same strategy, mandate, or investment objective.