Q13. Which of the following statements about soft dollars is TRUE?

A)     Fiduciaries must disclose actual, but not potential, conflicts of interest.

B)     Items purchased with soft dollars must provide a benefit to the firm.

C)     Items purchased with soft dollars must provide a benefit to the client.

Q14. Carl Johnson, a large equity client of Madison Investment Advisors, directs Madison to pass along old copies of any research purchased with soft dollars generated by trades in his account to his friend Jacob Wisnewski. Madison receives about ten such reports per year, and, after these have been reviewed in the context of their relevance to Johnson’s account, they are forwarded on to Wisnewski. With regard to this procedure, which of the following statements is TRUE? The research:

A)      provides a benefit to Johnson and may be released to Wisnewski with the permission of the source.

B)      does provide a benefit to Johnson but may not be released to Wisnewski with or without the permission of the source.

C)      does not provide a benefit to Johnson but may be released to Wisnewski with the permission of the source.

Q15. Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Investment managers must:

A)      avoid agency relationships.

B)      minimize transactions costs.

C)      seek the best price and execution.

Q16. Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Items purchased with soft dollars must:

A)        provide a benefit to the client.

B)        provide a benefit to the firm.

C)        provide at least 50% of their benefits to the client.

答案和详解如下：

Q13. Which of the following statements about soft dollars is TRUE?

A)     Fiduciaries must disclose actual, but not potential, conflicts of interest.

B)     Items purchased with soft dollars must provide a benefit to the firm.

C)     Items purchased with soft dollars must provide a benefit to the client.

Correct answer is C)

Items purchased with soft dollars must provide a benefit to the client. If this benefit is less than 100 percent to the client, soft dollars can only be used to purchase the item in proportion to the benefit derived by the client.

Q14. Carl Johnson, a large equity client of Madison Investment Advisors, directs Madison to pass along old copies of any research purchased with soft dollars generated by trades in his account to his friend Jacob Wisnewski. Madison receives about ten such reports per year, and, after these have been reviewed in the context of their relevance to Johnson’s account, they are forwarded on to Wisnewski. With regard to this procedure, which of the following statements is TRUE? The research:

A)      provides a benefit to Johnson and may be released to Wisnewski with the permission of the source.

B)      does provide a benefit to Johnson but may not be released to Wisnewski with or without the permission of the source.

C)      does not provide a benefit to Johnson but may be released to Wisnewski with the permission of the source.

Correct answer is A)

Since the research received is relevant to and is used for the benefit of Johnson, there is nothing inherently wrong with passing the reports to Wisnewski unless precluded from doing so by the provider of the research.

Q15. Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Investment managers must:

A)      avoid agency relationships.

B)      minimize transactions costs.

C)      seek the best price and execution.

Correct answer is C)

Investment managers must seek the best price and execution.

Q16. Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Items purchased with soft dollars must:

A)        provide a benefit to the client.

B)        provide a benefit to the firm.

C)        provide at least 50% of their benefits to the client.

Correct answer is A)

Items purchased with soft dollars must provide a benefit to the client.

thanks

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