Marc Randall, CFA, is an investment analyst. During a meeting with a potential client, Randall's boss states that, "You can be sure our investments will always outperform Treasury Bonds because of our fine research staff members, like Marc." Randall knows that this statement is:

A) a violation of the Standard concerning prohibition against misrepresentation.

B) a violation of fiduciary duties owed to clients under the Standards.

C) not in violation of the Code and Standards.

Ellen Miamoto, CFA, is preparing a research report on an employment agency, Temp Help, Inc. She includes in her report:

• A copy of a paragraph from a report by the Wall Street research firm of Benson Smith.
• A graph Miamoto has modified based on an original graph prepared by Gordon Thompson that was published in the Wall Street Journal.
• A chart of national employment trends that Miamoto created using data from the U.S. government's Bureau of Labor Statistics.

A) Benson Smith, Gordon Thompson, and the Bureau of Labor Statistics.

B) Benson Smith only.

C) Benson Smith and Gordon Thompson.

A CFA charterholder gathers the closing prices of a security from a widely read publication. The charterholder uses the data as part of a report she is preparing and fails to report the data source in the report. This is:

A) a violation of Standard I(C).

B) not a violation of Standard I(C) if the data cannot be gathered from several public sources.

C) not a violation of Standard I(C) if the data can be gathered from several public sources.

Which of the following is most likely permitted under Standard I(C), Misrepresentation?

A) Including an exhibit of the current yield curve in a report to a client without stating its source.

B) Using excerpts from reports prepared by others without acknowledgement.

C) Citing quotes attributed to "investment experts" without specific reference.

A money manager works for a full-service brokerage firm. After meeting with a new client and gathering all relevant information, the money manager says that she thinks her firm can perform all the financial services the new client needs. With respect to Standard I(C), Misrepresentation, this:

A) may not be a violation if the representation was made orally.

B) may not be a violation if the manager's opinion is based upon the factual information gathered.

C) is a violation because she cannot make statements like this under any circumstances.

A copyrighted technique for measuring the downside risk of an investment has just been revealed to the public. If an analyst adopts the technique, he must cite the use of the technique in all research reports in which the technique is used EXCEPT:

A) if the analyst does not modify the technique at all.

B) Neither of these answers provide grounds for an exception.

C) if the analyst uses reasonable care and verifies that the technique provides superior results.

According to CFA Institute Standards of Professional Conduct, which of the following is NOT a form of plagiarism?

A) Citing specific quotations supposedly attributable to "leading analysts" and "investment experts" without specific reference.

B) Presenting statistical estimates of forecasts prepared by others with the source identified, but without qualifying statements or caveats that may have been used.

C) Using factual information published by recognized financial and statistical reporting services or similar sources without an acknowledgment.

Which of the following is NOT expressly prohibited by Standard I(C), Misrepresentation?

A) providing information on guaranteed investment products.

B) misrepresenting the services a member is capable of performing.

C) misrepresenting a member’s academic or professional credentials.

At the time of its initial public offering (IPO), a mutual fund is invested primarily in junk bonds. As part of its strategy, it is also invested in some zero-coupon U.S. Treasury bonds. The amount of the investment in the Treasury bonds is such that their maturity value equals 90% of the current value of the fund. Which of the following may a CFA Institute member say to her clients concerning the fund at issuance?

A) Since the fund is backed by the U.S. government, you know you will get your money back.

B) A CFA Institute member may not make either of these statements.

C) The fund is virtually default risk free.

Jamie Pyles, a portfolio management trainee for a money management firm, is trying to create a client base. He phones prospective clients, telling them that he is a portfolio manager. He informs prospective clients that based on the last five years of performance of his firm, he can guarantee the client at least a 75% return. He informs them that his firm can provide all of the services that they will ever need. What is the minimum number of misrepresentations Jamie has made to the prospective clients in violation of Standard I(C), Misrepresentation?

A) 3.

B) 5.

C) 2.

Which of the following is NOT considered plagiarism under CFA Institute Standards?

A) Using factual information from a recognized financial information agency without acknowledging the source of the information.

B) Improving an existing report and using it inside the company under a new title without acknowledging the source of the original report.

C) Adjusting an already published model and announcing it as a new model without acknowledging the source of the original model.

Paul Thomas, CFA, is designing a new layout for research reports his firm writes and issues on individual stocks. In his design, Thomas includes a stock chart on the first page of each report. He does not reference that the charts are copied from an unrecognizable Finance web site. Thomas has:

A) violated CFA Institute Standards of Professional Conduct because he did not state the source of the charts.

B) not violated CFA Institute Standards of Professional Conduct because these charts are widely available over the Internet.

C) violated CFA Institute Standards of Professional Conduct because he did not make sure that the information in these charts is accurate.

An analyst preparing a report does NOT need to cite the use of which of the following?

A) A recent quote from Alan Greenspan.

B) Estimates of betas provided by Standard & Poor's.

C) Charts developed by a colleague in the same firm.

All of the following violate Standard I(C), Misrepresentation, EXCEPT:

A) presenting factual information published by recognized statistical reporting services without acknowledgment.

B) copying a proprietary computerized spreadsheet without seeking authorization from the creators.

C) citing quotes attributable to "investment experts" without specific references.

According to CFA Institute Standards of Professional Conduct, which of the following statements about the prohibition against plagiarism is most correct? The prohibition against plagiarism applies to written materials:

A) only.

B) and oral communications only.

C) oral communications, and telecommunications.

The following information involves two research analysts at a brokerage firm.

• Erik Bagenot, CFA, is preparing a research report on Global Enterprises, Inc. In preparing the report, he uses materials from many sources. For example, he uses factual information published by Standard & Poor's Corporation without acknowledging the source. He also uses excerpts from a research report prepared by another analyst. Bagenot makes only a slight change in wording for these excerpts, but acknowledges the source.
• Sally Wain, who is currently enrolled in the CFA program, is preparing a research report on Manson Telecommunications. She attends a conference in which several investment experts provide their views about the future prospects of this company. Wain cites several quotations from these investment experts in her report without specific reference.

According to CFA Institute Standards of Professional Conduct involving prohibition against plagiarism, which of the following statements is CORRECT?

A) Wain violated the Standards, but Bagenot did not.

B) Both Bagenot and Wain violated the Standards.

C) Bagenot violated the Standards, but Wain did not.

Which of the following is NOT a form of plagiarism?

A) Using factual information published by a recognized financial statistics reporting service without acknowledgment.

B) Presenting statistical forecasts by others with the sources identified but without the qualifying statements that may have been used by the originator.

C) Citing quotations said to be attributable to "leading analysts" or "investment experts" without specific reference.

Wes Smith, CFA, has been working toward the completion of a Master of Science in Finance. He has passed all the necessary courses and written the necessary thesis. He still must defend the thesis in one month. Smith’s thesis advisor assures him that he will pass the thesis defense. Smith has new business cards printed with “M.S. in Finance” after his name. This is a violation of:

A) Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program.

B) none of the Standards if Smith does not make the cards public until after he defends his thesis and receives his degree.

C) Standard I(C), Misrepresentation.