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标题: Reading 1: Ethical and Professional Standards Sample [打印本页]

作者: cfalevel1QB 时间: 2012-3-19 11:37 标题: [2012 L1] Ethical and Professional Standards 【Session 1 - Reading 1】Sample

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

C)	verify the suitability of the investment recommendation before placing the client’s order.

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 client instructs him to. Identifying other clients for this investment would fall under Standard III(B) Fair Dealing.

作者: cfalevel1QB 时间: 2012-3-19 11:39

本帖最后由 cfalevel1QB 于 2012-3-19 11:43 编辑

A broker and CFA charterholder has been arrested for the crime of murder. Which, if any, of the following could result in the member being summarily suspended from using the CFA designation?

A)	Both of the results listed here.

B)	Either being convicted or pleading guilty to the crime.

C)	He is acquitted of the crime, but he is barred from continuing to work in the investment industry.

Both of these are reasons that CFA Institute may use for summarily suspending use of the CFA designation.

作者: cfalevel1QB 时间: 2012-3-19 11:43

Steve Jones is a member of CFA Institute but has not earned the CFA designation yet. CFA Institute is investigating Jones’ activities. If Jones declines to cooperate, he:

A) is within his right only because it could be self incriminating.

B) is within his right only because he does not have the CFA designation yet.

C) could be summarily suspended from membership.

Refusing to cooperate with a CFA Institute investigation of a member’s behavior could lead to suspension of membership. If the member has earned the right to use the CFA designation, the punishment could be suspension of use of the designation.

作者: cfalevel1QB 时间: 2012-3-19 11:45

Which of the following is least accurate regarding reasons for imposing a summary suspension upon covered persons?

A) Failure to return the annual professional conduct statement.

B) Disbarment under securities laws.

C) Misdemeanor charge for the possession of illegal narcotic substances.

A single misdemeanor conviction for possession of illegal narcotics is not grounds for a summary suspension.

作者: cfalevel1QB 时间: 2012-3-19 11:46

With respect to filing complaints concerning the professional conduct of a CFA Institute member, which of the following is CORRECT?
A)
Anyone can write the Professional Conduct Program staff with a complaint concerning the conduct of any member.
B)
Only other members can write the Professional Conduct Program staff with a complaint concerning the conduct of another member.
C)
Anyone can write the Standards and Policy Committee staff with a complaint concerning the conduct of any member.

This is from page ix of the Standards of Practice Handbook. Complaints may be filed by anyone and are to be written to the Professional Conduct Program staff.

作者: cfalevel1QB 时间: 2012-3-19 11:47

With respect to the CFA Institute enforcement of the Code and Standards, which of the following is NOT a possible disciplinary sanction?

A)	Private censure.

B)	Refusing to allow a candidate for the CFA designation to take one of the exams.

C)	Payment of a fine.

CFA Institute does not impose fines. All of the other choices are possible sanctions. CFA Institute may suspend a candidate from further participation in the CFA program.

作者: cfalevel1QB 时间: 2012-3-19 11:48

Which of the following correctly lists disciplinary sanctions in order of severity, lowest to highest, that the Designated Officer may take as a result of an investigation?

A)	Suspension of the CFA designation, public censure, revocation of the CFA designation.

B)	Public censure, suspension of the CFA designation, revocation of the CFA designation.

C)	Suspension of membership, revocation of membership, public censure.

Public censure is less severe than suspension from using the CFA designation, and suspension is less severe than revocation.

作者: cfalevel1QB 时间: 2012-3-19 11:48

A member or candidate who rejects a disciplinary sanction proposed by a Designated Officer of the Professional Conduct Program:

A)	will be suspended from membership or participation in the CFA Program.

B)	will typically not be subject to further disciplinary procedure unless a new investigation is initiated.

C)	may request an appeal to a hearing panel.

A member or candidate may accept a proposed disciplinary sanction or request an appeal to a hearing panel.

作者: cfalevel1QB 时间: 2012-3-19 11:50

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

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

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

C)	submit to clients, at least quarterly, itemized statements detailing all of the period’s transactions.

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.

作者: cfalevel1QB 时间: 2012-3-19 11:50

Which of the following activities would be following a component of the Code of Ethics explicitly?

A)	Consulting with colleagues about opinions you reach in your research.

B)	Maintaining a list of colleagues who have violated the CFA Institute standards.

C)	Attending continuing education seminars on investing and inviting colleagues to come along.

The Code states that a member shall “Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.” None of the other answers qualify.

作者: cfalevel1QB 时间: 2012-3-19 11:51

According to the Code of Ethics, the professional judgment of a member should be:

A)	guided by the SEC guidelines.

B)	dependent on that of his/her colleagues.

C)	independent.

The Code of Ethics states that the CFA Institute member shall “Use reasonable care and exercise independent professional judgment.” None of the other answers resemble anything in the Code.

作者: cfalevel1QB 时间: 2012-3-19 11:52

According to the Code of Ethics, which of the following statements is NOT correct? CFA Institute members are required to:

A)	use reasonable care and exercise independent professional judgment.

B)	maintain and improve their competence and strive to maintain the competence of others in the profession.

C)	comply with the CFA Institute Performance Presentation Standards.

The CFA Institute-PPS are voluntary standards for the industry. Firms are not required to comply with these standards when presenting performance. The other statements are each components of the CFA Institute Code of Ethics.

作者: cfalevel1QB 时间: 2012-3-19 11:53

Which of the following is NOT part of the CFA Institute Code of Ethics?

A)	Independent judgment.

B)	Competence.

C)	Contractual provisions.

Contractual provisions are not part of the Code of Ethics.

作者: cfalevel1QB 时间: 2012-3-19 11:54

The first component of the Code of Ethics does NOT explicitly say that a CFA Institute member will act in a certain manner with respect to which of the following groups?

The SEC.

B)	Colleagues in the investment profession.

C)	The public.

The SEC is not mentioned in the Code of Ethics. Component one mentions duties to the public, clients, prospects, employers, employees, colleagues, and other participants in the global capital markets.

作者: hinsafdar 时间: 2012-3-19 13:39

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

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

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

C)	submit to clients, at least quarterly, itemized statements detailing all of the period’s transactions.

作者: hinsafdar 时间: 2012-3-19 13:40

Which of the following activities would be following a component of the Code of Ethics explicitly?

A)	Consulting with colleagues about opinions you reach in your research.

B)	Attending continuing education seminars on investing and inviting colleagues to come along.

C)	Maintaining a list of colleagues who have violated the CFA Institute standards.

作者: hinsafdar 时间: 2012-3-19 13:41

According to the Code of Ethics, the professional judgment of a member should be:

A)	independent.

B)	guided by the SEC guidelines.

C)	dependent on that of his/her colleagues.

The Code of Ethics states that the CFA Institute member shall “Use reasonable care and exercise independent professional judgment.” None of the other answers resemble anything in the Code.

作者: hinsafdar 时间: 2012-3-19 13:41

According to the Code of Ethics, which of the following statements is NOT correct? CFA Institute members are required to:

A)	use reasonable care and exercise independent professional judgment.

B)	comply with the CFA Institute Performance Presentation Standards.

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

作者: hinsafdar 时间: 2012-3-19 13:41

Which of the following is NOT part of the CFA Institute Code of Ethics?

A)	Independent judgment.

B)	Competence.

C)	Contractual provisions.

Contractual provisions are not part of the Code of Ethics.

作者: hinsafdar 时间: 2012-3-19 13:42

The first component of the Code of Ethics does NOT explicitly say that a CFA Institute member will act in a certain manner with respect to which of the following groups?

The SEC.

B)	Colleagues in the investment profession.

C)	The public.

作者: hinsafdar 时间: 2012-3-19 13:42

All of the following are components of the Code of Ethics EXCEPT:

A)	using reasonable care and exercising independent professional judgment.

B)	striving to maintain and improve their competence and the competence of others in the profession.

C)	demonstrating diligence, independence, and thoroughness when preparing investment reports.

Demonstrating diligence, independence, and thoroughness when preparing investment reports is found in the Standards of Professional Conduct.

作者: hinsafdar 时间: 2012-3-19 13:43

Which of the following is a component of the Code of Ethics? CFA Institute members shall:

A)	not knowingly participate or assist in any violation of laws, rules, or regulations.

B)	use reasonable care and exercise independent professional judgment.

C)	use particular care in determining applicable fiduciary duty.

Using reasonable care and exercising independent professional judgment is one of the components of the Code of Ethics, whereas the other statements are part of the Standards of Professional Conduct.

作者: hinsafdar 时间: 2012-3-19 13:44

Mike Johnson, who is sitting for Level III of the CFA exam this year, is a junior consultant at a small investment advisory firm. Julie Gowan, CFA, is Johnson’s supervisor and in the last three months had been letting Johnson develop a clientele. Johnson had met Mrs. Campbell two months earlier as a referral from an existing client: Mrs. Smith. Following his recent second visit with Mrs. Campbell, Johnson gave Campbell a personal data form to complete and return. The purpose of the form was to gather information about Campbell’s financial situation, investment experience, and investment objectives. Upon receiving the completed form in the mail, Johnson had his assistant, who is a CFA Level I candidate, type up the information. Johnson then reviewed the information and determined that he needed to call Campbell to clarify several items and to request more information.When Campbell answered the phone and Johnson identified himself, Campbell immediately asked if Johnson was still confident in the firm’s recommendation to buy shares of Brown Company, which Smith had purchased upon the firm’s recommendation three months earlier. The rapid rise of the stock of Brown Company after the recommendation, Campbell added, was the reason Campbell wanted to meet with a representative of Johnson’s firm. Johnson quickly did a search on his computer and found the buy recommendation on Brown Company that had been sent to Smith and other clients. Johnson then remembered that some of the clients, who were his friends, had been very happy with the stock’s performance. Johnson responded to Campbell by saying that purchasing the stock was a good idea.
Johnson then asked for a few details concerning Campbell’s situation, and Campbell answered some questions over the phone. Some of the information was not at her fingertips, so she promised to mail it to Johnson.During the phone conversation, Campbell stated that it is extremely important that the information she is providing to Johnson be considered confidential for several reasons. First, as a result of a lawsuit from a former neighbor, Campbell needs to hide some assets to avoid paying a judgment. Therefore, she wants to open up two separate accounts; a small one in her name, and a second account in the name of the company that Campbell owns. Second, Campbell told Johnson that she is about to file for divorce from her husband and does not want her husband to know about the accounts. After collecting all the information he needed, Johnson visited with Gowan to ask advice about opening the account in the name of Campbell’s company. Gowan told Johnson that Campbell should open the account in the name of a fictitious company instead of using the name of Campbell’s company. This would make it more difficult for the courts to find the assets. However, the supervisor stated, "You realize that opening an account in the name of a fictitious firm is illegal so I cannot suggest that you do it. I am only saying that, if you did this, it would help Campbell accomplish her objective."
Later that day, Johnson went to a restaurant and met his old college roommate, William Black, who is now a divorce attorney. Johnson told Black all about Campbell’s situation and suggested that, if Black needs a new client, he should contact Campbell who is about to divorce her husband. Black said he could not act on the information because Campbell’s husband had seen him already about a possible divorce. Johnson assured Black that, as they had agreed, he did not tell Campbell about the possibility of Johnson passing her name on to Black. Black thanked Johnson for the lead and said that, thanks to Johnson’s referrals, he currently had more clients than he could handle anyway. Despite that, Black paid for the dinner as he usually did when Johnson gave him a good lead. Did Johnson violate the Code and Standards by telling Black about Campbell’s impending divorce?

A)	No, because Black is not going to act on the information.

B)	Yes, he violated client-member confidentiality.

C)	No, because the impending divorce had nothing to do with Campbell’s financial situation.

Johnson violated Standard III(E), which states that all information about current and former clients and prospects must be kept confidential. The fact that Black does not act on the information, and that Black already knew that Campbell and her husband were having marital problems is irrelevant. Although the impending divorce had nothing to do with Campbell's financial situation, this information was clearly communicated to Johnson "within the scope of the client-member relationship." (Study Session 1, LOS 2.a,b)

Did Johnson violate the Code and Standards by the way he gathered information from Campbell using the personal data form?

A)	No, he did not violate the Code and Standards by the way he gathered information.

B)	Yes, because he failed to collect the information during face-to-face contact.

C)	Yes, because he permitted his assistant who does not hold the CFA designation to see this confidential information.

There is no provision that would prohibit Johnson from gathering information through the mail,nor is there a provision prohibiting employees of an investing management firm from working with confidential client information. (Study Session 1, LOS 2.a,b)

In his recommendation of Campbell buying the shares of Brown company, Johnson violates the Code and Standards concerning:

A)	Standard III(C) Suitability but not Standard V(A) Diligence and Reasonable Basis.

B)	both Standard III(C) Suitability as well as Standard V(A) Diligence and Reasonable Basis.

C)	Standard V(A) Diligence and Reasonable Basis but not Standard III(C) Suitability.

Although Johnson’s firm had made the recommendation three months earlier, he obviously had not been directly involved in the recommendation, nor did he check to see if any new information had been gathered on Brown Company. This is a violation of Standard V(A). Since the client profile was still incomplete at the time of the recommendation, Johnson did not know if Brown Company was suitable for Campbell. The stock had obviously gone up in value since the last recommendation and thus it may not have much capital gain potential left. This is a violation of Standard III(C). (Study Session 1, LOS 2.a,b)

Did Johnson's supervisor violate the Code and Standards when she told Johnson about a more effective way to hide assets?

A)	No, because the supervisor specifically stated that, "I cannot suggest" that you open an account in the name of a fictitious firm.

B)	No, because the supervisor did not take specific action that violated the law.

C)	Yes, because the supervisor assisted in an apparent violation of law.

Johnson's supervisor violated the Code and Standards when she told Johnson about a more effective way to hide assets. Standard I(A), Knowledge of the Law, states that "members shall not knowingly participate or assist in any violation of such laws..."Giving information about which illegal act will most benefit Campbell falls into this category. Stating that "I cannot suggest doing this," does not avert blame from the supervisor. She has assisted in the violation of the law by suggesting how best to break the law. Also, there is no confidentiality relationship between investment professionals and their supervisor. (Study Session 1, LOS 2.a,b)

Which of the following is a violation of the Code and Standards?

A)	Johnson having the assistant type up Campbell’s information.

B)	Black paying for the dinner with Johnson.

C)	Johnson gathering information over the phone.

Apparently Johnson has been referring many clients to Black, a practice Johnson hides from the clients, and the dinners Black has paid in return would qualify as a benefit received by the member or delivered to others for the recommendation. This violates Standard VI(C) Referral Fees and Standard III(E) Preservation of Confidentiality. None of the other circumstances listed violate the Code and Standards. (Study Session 1, LOS 2.a,b)

Is Johnson in violation of the Code and Standards if he informs the legal authorities that Campbell is attempting to hide assets from the courts?

A)	No, because Campbell has done something illegal.

B)	Yes, because he would be violating client-member confidentiality.

C)	Yes, because Johnson has only hearsay information about illegal activity and he would need written documentation to justify notifying the legal authorities.

Johnson is not in violation of the Code and Standards if he informs the legal authorities that Campbell is attempting to hide assets from the courts, because Campbell has done something illegal. According to Standard III(E), the rules of confidentiality do not apply when a member receives information concerning illegal activities. (Study Session 1, LOS 2.a,b)

作者: hinsafdar 时间: 2012-3-19 13:44

In dealing with the public and others, the CFA Institute Code of Ethics indicates that CFA Institute members will act with:

A)	confidence, knowledge, and high ethical standards.

B)	honesty, professionalism, and goodwill.

C)	integrity, competence, and respect.

Integrity, competence, and respect are included in the first component of the Code of Ethics.

作者: hinsafdar 时间: 2012-3-19 13:44

Which of the following is NOT an act explicitly referred to in the Code of Ethics?

A)	Using reasonable care when making investment recommendations.

B)	Giving free introductory seminars on investing to the public.

C)	Improve professional competence.

Although the Code says a member has obligations to the public, educating the general public for whatever reason is not implied.

作者: hinsafdar 时间: 2012-3-19 13:45

Which of the following is a component of the Code of Ethics?

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

B)	Members and candidates shall not engage in any conduct or commit any act that compromises the integrity of the CFA designation or the integrity or validity of the examinations leading to the award of the right to use the CFA designation.

Members shall not copy or use, in substantially the same form as the original, material prepared by another without acknowledging and identifying the name of the author, publisher, or source of such material. Members may use, without acknowledgment, factual information published by recognized financial and statistical reporting services or similar sources.

This is a component of the Code of Ethics. Others pertain to the Standards of Practice.

作者: hinsafdar 时间: 2012-3-19 13:45

Which of the following is a component of the Code of Ethics? CFA Institute members shall:

A)	strive to maintain and improve their competence and the competence of others in the profession.

B)	act for the benefit of their clients and place their clients' interests before their own.

C)	disclose to their employer all matters that reasonably could be expected to interfere with their duty to their employer or ability to make unbiased and objective recommendations.

Striving to maintain and improve their competence and the competence of others in the profession is one of the components of the Code of Ethics, whereas the other statements are part of the Standards of Professional Conduct.

作者: hinsafdar 时间: 2012-3-19 13:45

The Code of Ethics does NOT explicitly say that a CFA Institute member shall do which of the following?

A)	Reflect credit on the profession.

B)	Actively lobby for new laws to protect the public.

C)	Act with integrity.

The Code of Ethics says nothing about a CFA Institute member lobbying for new laws. In fact, legal issues are not a part of the Code. The Standards of Professional Conduct say that the member shall obey laws.

作者: hinsafdar 时间: 2012-3-19 13:46

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.

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.” Neither of the other choices are implied by the Code.

作者: hinsafdar 时间: 2012-3-19 13:46

The first component of the Code of Ethics does NOT explicitly say that a CFA Institute member will act with which of the following?

A)	Solemnity.

B)	Integrity.

C)	Competence.

Component one mentions all of these except solemnity.

作者: hinsafdar 时间: 2012-3-19 13:46

According to the Code of Ethics, when practicing in a professional and ethical manner the goal is to:

A)	increase membership in CFA Institute.

B)	reflect credit on members and the profession.

C)	resolve conflicts between clients and employers.

The Code states that a member shall “Practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and their profession.”

作者: hinsafdar 时间: 2012-3-19 13:47

According to the CFA Institute Code of Ethics, CFA Institute Members and Candidates must do all of the following EXCEPT:

A)	not knowingly violate the securities acts and laws.

B)	exercise independent judgment.

C)	act with integrity and dignity.

Not knowingly violating the law is in the Standards of Professional Conduct, but is not in the Code of Ethics.

作者: hinsafdar 时间: 2012-3-19 13:51

Which of the following is NOT part of the CFA Institute Code of Ethics. Members of CFA Institute will:

A)	use reasonable care and exercise independent professional judgment.

B)	recommend investments that maximize returns for a given level of risk.

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

Standard of Professional Conduct III(C), not the Code of Ethics, requires that investments be appropriate and suitable.

作者: hinsafdar 时间: 2012-3-19 13:52

Which of the following is a component of the Code of Ethics?

A)	Members shall use reasonable care and exercise independent professional judgment.

B)	Members shall not knowingly participate or assist in any violation of such laws, rules, or regulations.

C)	Members shall not engage in any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects adversely on their honesty, trustworthiness, or professional competence.

This is a component of the Code of Ethics. Others pertain to the Standards of Professional Conduct.

作者: prashantsahni 时间: 2012-3-19 13:55

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

A)	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.

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

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

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.

作者: prashantsahni 时间: 2012-3-19 13:57

Michael Malone, CFA, is an investment analyst for a large brokerage firm in New York who covers the airlines industry. After hours in his personal time, Malone maintains an online blog on which he expresses his personal opinions about various investment opportunities, including, but not limited to, the airlines industry. On his blog, he posts a very negative investment opinion about WestAir stock. Malone knows that WestAir's stock will be downgraded to a “sell” by his firm next week. Malone has:

A)	violated Standard II(A) Material Nonpublic Information by releasing material that could negatively impact the price of the security.

B)	violated Standard IV(A) Loyalty by divulging confidential information that is the intellectual property of his employer.

C)	violated Standard VI(B) Priority of Transactions by releasing material information to the public before releasing to the firm’s clients.

Malone is in violation of Standard II(A) because the information is both material and nonpublic. He is in violation whether or not he divulges the impending downgrade by his firm on his blog, because he is using nonpublic information. A “sell” opinion on a security issued by a large brokerage firm will almost certainly impact the stock’s price.

作者: prashantsahni 时间: 2012-3-19 13:58

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

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

C)	verify the suitability of the investment recommendation before placing the client’s order.

作者: scbjoywang 时间: 2012-5-26 21:33

tks~~~~~~~~~~~~~~~~~~~~~~~~~

作者: mrcon 时间: 2018-2-26 20:04

千里之行始于足下

作者: zgh1988 时间: 2018-11-15 05:46

finished reading, thanks so much

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