Q24. Bob Smith, CFA, is an outside board member of Atlantic Technologies, but is not paid by the firm for his services. An employee at Atlantic informs Smith that Atlantic has improperly timed the booking of contracts to achieve the desired quarterly financial results. The misleading financial statements would turn losses into profits. Smith confers with the firm's legal counsel who indicates that this conduct is, in fact, illegal. Smith urges Sharon White, Atlantic's chief operating executive, to change the financial statements, but she refuses to do so. According to CFA Institute Standards of Professional Conduct, which of the following statements best describes what Smith should do in this situation?

A)   Smith should immediately make CFA Institute aware of the situation at Atlantic.

B)   Smith should wait until the next board meeting, which is scheduled in two weeks, to make other board members aware of the situation.

C)   Smith should promptly disassociate himself from Atlantic's actions by resigning as a director or by reporting the activities to the appropriate authorities.

Q25. A CFA Institute member is also a member and the portfolio manager of an environmentalist group. In its charter, the environmentalist group lists a group of companies its members should boycott. The CFA Institute member would violate Standard I(A) concerning obeying all rules and regulations if the member:

A)   performs either of the activities listed here.

B)   actively protests against a publicly traded firm boycotted by the group.

C)   purchases stock of a boycotted firm for the group's portfolio.

Q26. For an employee with the CFA designation who works for a firm, which of the following is NOT necessary to meet the requirements of the Code and Standards?

A)   It is recommended that their employer is aware of the Code and Standards.

B)   Deliver a copy of the Code and Standards to their employer.

C)   Recommend notifying their employer of their responsibility to follow the Code and Standards.

Q27. A government committee has concluded that investment company fees should be disclosed to clients each quarter and has proposed new legislation to require this. Currently, the legal requirement is to report such data annually. In compliance with current legal requirements, Dolphin Investments discloses its fees annually. Eugene Shin, CFA, Dolphin's compliance officer, learns of the proposed changes but does not convert Dolphin's reporting to a quarterly basis. Shin's decision not to act:

A)   is not a violation of the Code and Standards.

B)   constitutes professional misconduct as defined in the Code and Standards.

C)   is a violation of his duty to employer as defined in the Code and Standards.