Q12.An analyst thinks that a major change in the tax law will benefit holders of utility company stocks. She immediately begins calling all her clients and telling them of the upside potential of investing in such assets now. Based upon this information, this is most likely:

A)   a violation of Standard V(A), Diligence and Reasonable Basis.

B)   congruent with Standard V(A), Diligence and Reasonable Basis.

C)   a violation of Standard III(C), Suitability.

Q13.Bob Hatfield, CFA, has his own money management firm with two clients. The accounts of the two clients are equal in value. Hatfield has been trading on the clients’ behalf with a single brokerage firm for several years. Because of his many years of business, the brokerage firm occasionally gives Hatfield shares in an initial public offering (IPO) to sell to his clients. Hatfield has a policy of allocating the IPO shares equally between the portfolios of the two clients. This policy is:

A)   a violation of Standard III(C), Suitability.

B)   congruent with Standard III(C), Suitability.

C)   a violation of Standard III(B), Fair Dealing.

Q14.Kim Lee manages a variety of accounts at Superior Investments. Some are permitted to invest in tax-exempt issues only; others may not invest in a stock unless it pays dividends. Lee is researching a biotech firm specializing in the analysis of "mad cow" disease. While touring company facilities and meeting with management, she learns that they believe they may have found a way to reverse the disease. Moreover, one manager conjectured, "Suppose that we reversed the disease in someone who didn't even have it? We might then be able to boost that individual's IQ into the stratosphere!" Lee returns to her office and buys shares for all accounts under her supervision. This action is:

A)   a violation of the Standard concerning appropriateness and suitability of investment actions.

B)   appropriate given the obvious potential of the therapy.

C)   a violation of the Standard concerning fiduciary duties.

Q15.Procedures for compliance with Standard III(C), Suitability, include determining all of the following with respect to a client EXCEPT:

A)   social habits and interests.

B)   liquidity needs.

C)   return objectives.

答案和详解如下：

Q12.An analyst thinks that a major change in the tax law will benefit holders of utility company stocks. She immediately begins calling all her clients and telling them of the upside potential of investing in such assets now. Based upon this information, this is most likely:

A)   a violation of Standard V(A), Diligence and Reasonable Basis.

B)   congruent with Standard V(A), Diligence and Reasonable Basis.

C)   a violation of Standard III(C), Suitability.

Correct answer is C)

According to Standard III(C), the analyst needs to determine the suitability of an investment for each client. It is doubtful that all her clients are identical in their needs. According to the information, the analyst mentions the upside potential but does not mention the downside risk. Although the information says that she thinks that the change in the tax law will benefit holders of utility company stocks and says nothing of how she arrived at this conclusion, we do not know if she has or has not made her decision on a reasonable basis.

Q13.Bob Hatfield, CFA, has his own money management firm with two clients. The accounts of the two clients are equal in value. Hatfield has been trading on the clients’ behalf with a single brokerage firm for several years. Because of his many years of business, the brokerage firm occasionally gives Hatfield shares in an initial public offering (IPO) to sell to his clients. Hatfield has a policy of allocating the IPO shares equally between the portfolios of the two clients. This policy is:

A)   a violation of Standard III(C), Suitability.

B)   congruent with Standard III(C), Suitability.

C)   a violation of Standard III(B), Fair Dealing.

Correct answer is A)

According to Standard III(C), the analyst must consider the appropriateness and suitability of an investment recommendation for each portfolio or client. Having a fixed policy of adding investments to portfolios without evaluating their suitability is a violation of Standard III(C). The action does not violate Standard III(B)

Q14.Kim Lee manages a variety of accounts at Superior Investments. Some are permitted to invest in tax-exempt issues only; others may not invest in a stock unless it pays dividends. Lee is researching a biotech firm specializing in the analysis of "mad cow" disease. While touring company facilities and meeting with management, she learns that they believe they may have found a way to reverse the disease. Moreover, one manager conjectured, "Suppose that we reversed the disease in someone who didn't even have it? We might then be able to boost that individual's IQ into the stratosphere!" Lee returns to her office and buys shares for all accounts under her supervision. This action is:

A)   a violation of the Standard concerning appropriateness and suitability of investment actions.

B)   appropriate given the obvious potential of the therapy.

C)   a violation of the Standard concerning fiduciary duties.

Correct answer is A)

Given the variety of accounts under her supervision, it is not likely the shares of a speculative biotech firm would be suitable for all accounts. Placing such shares in all accounts indicates that she has failed to consider the appropriateness and suitability of the investment for each account, and this places her in violation of Standard III(C).

Q15.Procedures for compliance with Standard III(C), Suitability, include determining all of the following with respect to a client EXCEPT:

A)   social habits and interests.

B)   liquidity needs.

C)   return objectives.

Correct answer is A)

The procedures for compliance with Standard III(C) include determining all of the aspects of a client’s investment objectives and constraints mentioned above, but do not include gathering information about the client’s social habits and interests.

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