Q5. Litman’s plan for making Book the compliance officer at Cooper and Grey is:

A)   not appropriate because Book is not a member of CFAI.

B)   not appropriate because Book is new to the firm.

C)   not appropriate because in that position, Book should be the one reporting to the CEO and the board of directors.

Q6. In drafting procedures for monitoring performance and evaluating managers, the:

A)   suggestions by both Litman and Book are not generally accepted nor recommended by the CFAI Asset Manager Code of Professional Conduct.

B)   suggestion by Litman is generally accepted but that of Book is a violation of the CFAI Asset Manager Code of Professional Conduct.

C)   suggestions by both Litman and Book are generally accepted and recommended to comply with the CFAI Asset Manager Code of Professional Conduct.

Q7. In response to Book’s suggestions concerning the hiring of a third party to review information disseminated to clients and for the plan for dealing with a natural disaster, according to the CFAI Asset Manager Code of Professional Conduct, Litman should:

A)   adopt them both.

B)   ignore them both.

C)   adopt the plan for dealing with a natural disaster only.

答案和详解如下：

Q5. Litman’s plan for making Book the compliance officer at Cooper and Grey is:

A)   not appropriate because Book is not a member of CFAI.

B)   not appropriate because Book is new to the firm.

C)   not appropriate because in that position, Book should be the one reporting to the CEO and the board of directors.

Correct answer is C)

Recommend practices and procedures designed to prevent violations of the Asset Manager Code addresses compliance and support. Under compliance and support, the procedures specify that a compliance officer should be designated who reports directly to the CEO or board of directors and who is responsible for making sure compliance procedures are in place and followed. There are not strict and specific qualifications such being a member of CFAI (or not), nor how long the officer has been with the firm.

Q6. In drafting procedures for monitoring performance and evaluating managers, the:

A)   suggestions by both Litman and Book are not generally accepted nor recommended by the CFAI Asset Manager Code of Professional Conduct.

B)   suggestion by Litman is generally accepted but that of Book is a violation of the CFAI Asset Manager Code of Professional Conduct.

C)   suggestions by both Litman and Book are generally accepted and recommended to comply with the CFAI Asset Manager Code of Professional Conduct.

Correct answer is C)

Recommend practices and procedures designed to prevent violations of the Asset Manager Code address performance and valuation. Performance and valuation deal with reporting investment results in an accurate manner without misrepresentation and using fair-market values when determining portfolio asset values. A good guideline to follow would be the Global Investment Performance Standards (GIPS®), which incorporates a high level of quality in reporting requirements. Because manager compensation is sometimes based on performance results, managers may be tempted to manipulate performance results in an attempt to increase their compensation. To avoid this conflict of interest, procedures for valuing asset accounts should include transferring the responsibility of valuing asset accounts to an independent third party.

Q7. In response to Book’s suggestions concerning the hiring of a third party to review information disseminated to clients and for the plan for dealing with a natural disaster, according to the CFAI Asset Manager Code of Professional Conduct, Litman should:

A)   adopt them both.

B)   ignore them both.

C)   adopt the plan for dealing with a natural disaster only.

Correct answer is A)

Recommend practices and procedures designed to prevent violations of the Asset Manager Code addresses compliance and support. Compliance and support deal with: ensuring compliance with the Code and legal and regulatory requirements and appointing a compliance officer, ensuring that portfolio information disseminated to clients is accurate and complete and reviewed by an independent third party, appropriately maintaining records, employing qualified staff along with adequate resources, and instituting a contingency plan in the event of a natural disaster.