Reading 1: Code of Ethics and Standards of Professional Con - Ethical and Standards - 【CFA三级试题精选】 - CFA论坛

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22^#

发表于 2008-9-12 15:03 | 只看该作者

According to the Code of Ethics, a member reflects credit on the profession when a member:

A)	practices in a professional and ethical manner.

B)	consults with other members on a regular basis.

C)	places the clients first.

D)	reports on the violations of fellow members.

Answer and Explanation

Component four of the Code says that a member shall Practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and the profession. None of the other choices are implied by the Code.

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发表于 2008-9-12 15:04 | 只看该作者

There are six components of the CFA Institute Code of Ethics. All of the following are part of the Code of Ethics EXCEPT:

A)	Practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and their profession.

B)	Strive to maintain and improve the competence of regulatory bodies such as the Securities and Exchange Commission (SEC).

C)	Strive to maintain and improve the competence of others in the profession.

D)	Use reasonable care and exercise independent professional judgment.

Answer and Explanation

The Code of Ethics governs only the conduct of members and individuals in the profession, not the conduct of regulatory bodies. The first component of the CFA Institute Code of Ethics is to act with integrity, competence, diligence, respect, and in an ethical manner when dealing with the public, clients, prospects, employers, employees, and fellow members.

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24^#

发表于 2008-9-12 15:04 | 只看该作者

According to the CFA Institute Code of Ethics, CFA Institute members shall:

A)	maintain knowledge and comply with all applicable laws, rules and regulations.

B)	act with integrity, competence, diligence, respect, and in an ethical manner when dealing with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.

C)	exercise diligence and thoroughness in making investment recommendations or in taking investment actions.

D)	preserve the confidentiality of information communicated by clients, prospects, or employers concerning investment matters.

Answer and Explanation

Acting with integrity, competence, diligence, respect, and in an ethical manner when dealing with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets is one of the six components of the Code of Ethics, whereas the other statements are part of the Standards of Professional Conduct.

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25^#

发表于 2008-9-12 15:05 | 只看该作者

In accordance with Standard III (A) Loyalty, Prudence and Care, which of the following statements is least accurate? Members and Candidates should:

A)	submit to clients, at least quarterly, itemized statements detailing all of the periods transactions.

B)	make investment decisions in the context of the total portfolio.

C)	vote all proxies on behalf of clients in a responsible manner.

D)	utilize client brokerage to the sole benefit of the client.

Answer and Explanation

Because of the time and expense involved in voting a proxy, Members and Candidates are not required to vote every proxy. A cost benefit analysis can be performed to determine if it is necessary to vote a proxy.

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发表于 2008-9-12 15:06 | 只看该作者

Liam McCoy, CFA, has lunch with a wealthy client whose portfolio he manages. McCoy advises the client to double his current position in the JKM Corporation due to an anticipated increase in sales. In accordance with Standard (V) Investment Analysis, Recommendations and Actions, when McCoy returns to his office he should:

A)	identify other clients for whom JKM may be a suitable investment and notify them immediately of his recommendation.

B)	execute his clients order, and then consider whether or not JKM might be a suitable investment for McCoys personal portfolio.

C)	document the details of the conversation with the client with regard to his investment recommendation.

D)	verify the suitability of the investment recommendation before placing the clients order.

Answer and Explanation

Standard V(C) Record Retention requires that Members and Candidates document all recommendation and communications with clients. McCoy should document the details of the conversation, including any resulting investment decisions and/or actions. The suitability of the investment should have already been considered before the recommendation and McCoy should not execute the order until the the client instructs him to. Identifying other clients for this investment would fall under Standard III(B) Fair Dealing.