标题: Two questions from the Ethics self-test (not already posted) [打印本页] 作者: hardwork24 时间: 2013-3-30 20:49 标题: Two questions from the Ethics self-test (not already posted)
I just did the Ethics self-test and got two questions wrong, which I’m posting below:
Which one of the following statements is INCORRECT:
A. Members must comply with the Code and Standards even when doing so would conflict with applicable law.
B. Members must not engage in conduct that is legal if such conduct violates the Code and Standards.
C. Members must comply with the Code and Standards, in the absence of any applicable law.
D. Members must comply with the applicable law or regulation related to their professional activities.
I said: D, under the reasoning that you must comply with the code when it would conflict with applicable law (like in the case of operating in a less-strict country), you must not engage in conduct that is legal if it violates the code (again, like operating in a less-strict country), and you must comply with the code in the absence of any law. Hence, you must not ALWAYS comply with local law - it may sometimes be superceded by the Code.
Which of the following statements clearly CONFLICTS with the recommended procedures for compliance presented in the Standards of Practice Handbook?
A. Personal transactions include transactions in securities owned by the employee and members of his or her immediate family and transactions involving securities in which the employee has a beneficial interest.
B. Investment recommendations may be changed by an analyst without prior approval of a supervisory analyst.
C. Prior approval must be obtained for the personal investment trans?actions of all employees.
D. For confidentiality reasons, personal transactions should not be compared to those of clients or the employer unless requested by regulatory organizations.
I said C, but I really wasn’t sure about this one.
Any thoughts on the above? Thanks!作者: wilslm 时间: 2013-3-30 20:49
A
–> D is incorrect because the question no where mentions whether the applicable law is more strict or less strict.
for the second one
D作者: zephyranalyst 时间: 2013-3-30 20:49
For the first one, how can the answer be A? In the example I gave, you would still follow the code (which says, for example, no insider trading) and ignore applicable/local law (assuming it says insider trading is OK). In this case, you are clearly following the code even when it conflicts with local law?作者: tikfed 时间: 2013-3-30 20:49
A also for #1, not sure about #2
I think the issue with #1 is your definition of the word “conflicts”. Just b/c your following a more-strict standard doesn’t mean you’re conflicting with a law. for the example you mentioned: less-strict law so more-strict standard is followed. This means to me that members would be going above and beyond the law, not conflicting with it. In other words, you’re covering yourself by following the less-strict law and IN ADDITION adding another layer of protection by adhering to the more-strict standard.
I understood choice A to mean that standard must always be followed instead of laws, which is not the case and therefore the correct “incorrect” answer.
hope that helps - at least I think it’s correct, maybe its all hogwash. anyone else get this question correct? Is it in fact A?作者: therecruit 时间: 2013-3-30 20:49
you just looked at one aspect of the situation when the local law is less strict,
what if local law is more strict –> then you would follow it even if it conflicts with CFA codes and standards,
read example 5, pg 19 from CFA I textbook, its really long so m not typing it.
Hopefully that can give you a better insight.作者: Colum 时间: 2013-3-30 20:49
i say A and B.
For 2, why would NOT comparing personal transactions with client transactions conflict with the code?? it would be the opposite anyway作者: kingstongal 时间: 2013-3-30 20:49
The answers are A and D.
A (see page 19 Example 5 CFAI book 1- “always apply stricter rule, even if it conflicts with C&S”)
D (Disclosure of Conflicts when you are beneficial owner is a part of C&S and must be followed even if regulations don’t require it, also by process of elimination, A and C are obviously correct, the grey area one is B but you don’t ALWAYS need approval by supervisory analyst to change a recommendation, I recently read the Ethics section and never once recall reading that)作者: jarobi04 时间: 2013-3-30 20:49
I see where question 2 could be tricky, because C states ALL must be cleared, which I don’t recall reading… however, D is an obvious wrong answer作者: Walex 时间: 2013-3-30 20:49
D is the right answer for question 2, i remember getting it right in the self test.
But I do agree these darn questions can be tricky! uhhh作者: bpdulog 时间: 2013-3-30 20:49
can someone please explain why D is correct? the wording is confusing… thanks作者: random_walker47 时间: 2013-3-30 20:49
D is right because you should not keep your stock portfolio and personal investments hidden from clients (disclosure) until a regulatory agency asks to disclose it, the C&S state that you should disclose your investments as part of disclosure of potential conflicts of interest
