Two short ethics questions investment, principles, corporate, maintain, anywhere

ASSet_MANagemen

Book 1 Page 238 #2 and #7

Members and candidates must:

a) endorse the principles of sound corporate governance
b) foster the expansion of regularity oversight
c) strive to maintain and improve the competence of other investment Professionals


Answer is C. I think all the answers are crappy, but I picked A because I felt that some of the Standards apply to good corporate governance particularly for Charterholders who are on Boards. But anyway is answer C actually listed anywhere in the Code and Standards or is it just an implied rule?




Non-public information is material if it:

a) violated client confidentiality
b) would affect the price of a security
c) has not been fully disclosed to all market particpants.

Answer is B. Why is C wrong?

aidebaobao

the show NY Wrote:
-------------------------------------------------------
> Book 1 Page 238 #2 and #7
>
> Members and candidates must:
>
> a) endorse the principles of sound corporate
> governance
> b) foster the expansion of regularity oversight
> c) strive to maintain and improve the competence
> of other investment Professionals
>
>
> Answer is C. I think all the answers are crappy,
> but I picked A because I felt that some of the
> Standards apply to good corporate governance
> particularly for Charterholders who are on Boards.
> But anyway is answer C actually listed anywhere
> in the Code and Standards or is it just an implied
> rule?
>
>
>
>
> Non-public information is material if it:
>
> a) violated client confidentiality
> b) would affect the price of a security
> c) has not been fully disclosed to all market
> particpants.
>
> Answer is B. Why is C wrong?

1.) C is directly in the code, so obviously right.
2.) Lots of information is undisclosed, doesn't make it material. The CEO of McDonalds in a meeting said he had a McFlurry today and didn't like it, not material. The CEO of McDonalds in a behind closed door meeting said the McFlurry would be terminated for poor performance is material and nonpublic.



Edited 1 time(s). Last edit at Wednesday, June 1, 2011 at 04:10PM by Paraguay.

oneboy

ok second question was a dumb mistake.

on first one, can you tell me where that is in the code?

thanks.

jmh530

The third statement is actually regards to it being non-public, and doesn't make any reference to it's materiality.

cityboy

Maintain and improve their professional competence and strive
to maintain and improve the competence of other investment
professionals.


Literally word for word from the Code of Ethics.



Edited 1 time(s). Last edit at Wednesday, June 1, 2011 at 04:16PM by Paraguay.