标题: Giving gut reactions Stalla Mock Exam [打印本页] 作者: domani 时间: 2013-4-3 21:50 标题: Giving gut reactions Stalla Mock Exam
Cite: Stalla Mock Exam Question 7:
Reworded to protect Stalla’s Intellectual Property.
Danny, CFA meets an old friend Gideon, who asks him for investment advice. Danny tells Gideon that he is working 100 hour weeks and can only meet for coffee for 10 minutes to give him some ‘gut reactions.’ Both parties agree and meet. Is this a violation of any of the standards?
A) XX
B) XX
C) No, because Danny gave full warning that the consultation would be at no charge and would only be his ‘gut reactions’
D) Yes, because Danny should give the meeting enough consideration to make meaningful reccomendations.
I reworded this, but the basics are there. Why isn’t C acceptable?作者: agulani 时间: 2013-4-3 21:52
investment advice cannot be a gut reaction. needs to go thro’ the process of finding out what the needs are, and then provide relevant advice that satisfies those needs. none of that is happening in a 10 minute meeting.作者: irlfaan7 时间: 2013-4-3 21:54
My initial reaction was C as well. I guess it’s D because Gideon asked for investment advice. Even though it’s a short meeting, whatever he says would be “investment advice,” including gut reactions. It would be reasonable to expect Gideon to act on those gut reactions. Since 10 mins probably isn’t enough time to find out the whole story, and it’s not an informal setting, it is a violation.
I haven’t looked at ethics for a while though, so I could be on the wrong track. Someone else could probably give better reasoning..作者: farrukhsadiq 时间: 2013-4-3 21:56
Yeah, the way the question is worded, the answer is D because whatever is said is defined to be “investment advice.” Welcome to CFAstan.
In real life, you would say that a “gut reaction,” isn’t investment advice, and you’d almost certainly follow up with “you’d have to investigate more, but these are the things you’d look for.”
I would have gotten this question wrong.
