got 3 questions left on my list create, advice, because, gift

Wendy01

1. If # of contracts is 915.32, do you round down to 915 or round up to 916?

2. Passive / Replicating Index: Expensive to initially create, but then transaction costs are low because the only time you need to create transaction costs is to reinvest dividends. True?

3. Disclose vs Written Consent: anyone have any final advice here? I know if it is from a client, you can disclose a gift for past performance but ask for consent for a gift that is contingent on future performance. I think if it from a nonclient entity, you need written consent for past gifts but may not accept anything that is contingent on future events.

canadiananalyst

1. round nearest, so 915
2. true, or if it's a bond index, and a bond matures you have to reinvest that.
3. don't have a full answer but firstly it's about value of gift, then client gifts are ok if interests are aligned, gifts from brokers trying to bribe you aren't.

NakedPuts2011

so if broker says i'll give you world cup tickets if you send me business from these clients obviously thats disallowed even if you disclose--employer would say no way.

but what if broker says, thanks for sending me business, here is a weekend stay in vegas for your and your wife. i would assume you should disclose?

former

ok also on question 2: look at cfai volume 4 page 157.

119.69 --> 119 contracts

mik82

1. Round to nearest, this case #915
2. True, BUT you incur costs upon index reconstitution, index rebalancing and also for dividend and coupon reinvestment
2. Correct about Client ex-post and ex-ante gifts. Any non-client gifts must not even have hint of tainting Independence and Objectivity, and should be pre-approved and disclosed

jmh530

I don't think they'll penalise for 120 or 119. The whole technique is highlighted in the text as being approximate. Just write 119.69 ~ 120 make it clear where you came from. Job done.