Q6. With regard to the Yeats account, Jung broke the Code:

A)   only when she sent the trading records to the IRS.

B)   when she failed to purchase Blanton shares for Yeats in the morning, but not when she recommended Blanton shares for purchase.

C)   when she recommended Blanton shares for purchase, and when she failed to purchase Blanton shares for Yeats in the morning.

Q7. Which of the four rules Kratz wrote down is most likely in violation of the Code?

A)   Most stock research is done in-house. About 30 percent of Westmoreland Financial clients do not own bonds, but substantially all of client brokerage pays for bond research.

B)   Portfolio managers may accept any gift valued at less than $50 provided that they notify their supervisors in writing, but must receive written consent from the compliance officer in advance before accepting anything more expensive.

C)   IPO’s are distributed to about 60 percent of client accounts in proportion to account size, but the remaining 40 percent do not receive any allocation.

答案和详解如下：

Q6. With regard to the Yeats account, Jung broke the Code:

A)   only when she sent the trading records to the IRS.

B)   when she failed to purchase Blanton shares for Yeats in the morning, but not when she recommended Blanton shares for purchase.

C)   when she recommended Blanton shares for purchase, and when she failed to purchase Blanton shares for Yeats in the morning.

Correct answer is C)         

Jung violated the investment-process rules when she recommended Blanton stock for purchase based on nothing more than a recommendation from a client and a few minutes of analysis. She received a phone call an hour before the market opened, yet managed to talk to her client and research two stocks before the hour was up. She did not meet the standard, “Thoroughly investigate and research different investment options to have a reasonable basis for a recommendation.” As for Yeats’ shares, while she did not have enough information to recommend Blanton, she did have Yeats’ instructions to purchase the stock for himself.

here appear to be no insider-trading issues, as the only nonpublic information he cited was an informal conversation with the manager, which is not likely to be material. So Jung should have purchased the shares for Yeats immediately, but not recommended them for anyone else until she had researched the company thoroughly. Based on her reasoning for not buying Flimflam, Jung was apparently allowed to purchase specific stocks at the request of investors without submitting them for approval by the investment director, so no matter what she thought about Blanton, there was no reason to wait on buying shares for Yeats. Regarding the IRS, confidentiality rules do not necessarily apply to official legal investigations.

Q7. Which of the four rules Kratz wrote down is most likely in violation of the Code?

A)   Most stock research is done in-house. About 30 percent of Westmoreland Financial clients do not own bonds, but substantially all of client brokerage pays for bond research.

B)   Portfolio managers may accept any gift valued at less than $50 provided that they notify their supervisors in writing, but must receive written consent from the compliance officer in advance before accepting anything more expensive.

C)   IPO’s are distributed to about 60 percent of client accounts in proportion to account size, but the remaining 40 percent do not receive any allocation.

Correct answer is B)         

The Code prohibits the acceptance of cash gifts of any kind, though the other requirements in the gift policy appear to conform. The IPO allocation looks bad from the start, but the Code says investments must be fairly distributed among the accounts for which they are suitable. IPO’s are not for everyone, and it is certainly plausible that 40 percent of client accounts are too conservative for such securities. An annual review of investment policy statements is sufficient. Regarding soft dollars, the Code and Standards acknowledges that not every client will benefit from the all research. Such mismatches are unavoidable from a practical standpoint, and as long as brokerage is allocated toward research alone, the firm should be covered.