Q14. Carol Hull, CFA, is an investment advisor whose prospective client, Frank Peters, presents special requirements. To construct an investment policy statement for Peters, Hull inquires about Peters’ investment experience, risk and return objectives, and financial constraints. Peters states that he has a great deal of investment experience in the capital markets and does not wish to answer questions about his tolerance for risk or his other holdings. Under Standard III(C), Suitability, Hull:

A)   may accept Peters’ account but may only manage his portfolio to a benchmark or index.

B)   is permitted to manage Peters’ account without any knowledge of his risk preferences.

C)   must decline to enter into an advisory relationship with Peters.

Q15. The Securities and Exchange Commission (SEC) sanctioned Stephen Rangen, a former broker, for unsuitable recommendations and excessive trading in several accounts.  His clients were unsophisticated, inexperienced individual investors with limited means.  As such, they relied heavily on Rangen’s advice and expected him to initiate any transactions in their respective accounts.  The SEC found that Rangen’s trading methods were contrary to his clients’ goals.  For example, he used margin accounts and concentrated their equity holdings in particular securities.  Rangen claimed that his actions were justified because his clients were aware of the risks. 

Which of the following statements best describes why Rangen’s argument, that his clients were aware of the risks, did NOT meet the requirements of the Code and Standards? Rangen failed to:

A)      deal fairly and objectively with his clients when taking investment action.

B)      make recommendations that were consistent with his clients' financial needs.

C)      disclose to his clients all matters that reasonably could be expected to impair his ability to make unbiased and objective recommendations.

Q16. Rangen bought U.S. Treasury strips and over-the-counter stocks that did not produce income as sought by his clients.  Rangen claimed that his actions were justified because his firm’s research department recommended the purchase of the  Treasury strips. Also, he claimed the stocks that he bought were all in the top-rated categories of his firm’s research division.  Which of the following statements best describes why Rangen’s arguments, in which he attempted to shift the blame to his employer, did NOT meet the requirements of the Code and Standards? 

A)      Rangen misrepresented the basic characteristics of the investments that he bought for his clients' accounts.

B)      Rangen's duty was to make only recommendations that were in the best interests of his clients.

C)      Rangen did not use reasonable care and judgment to achieve and maintain independence and objectivity in taking investment actions.

[此贴子已经被作者于2009-1-9 15:55:00编辑过]

答案和详解如下：

Q14. Carol Hull, CFA, is an investment advisor whose prospective client, Frank Peters, presents special requirements. To construct an investment policy statement for Peters, Hull inquires about Peters’ investment experience, risk and return objectives, and financial constraints. Peters states that he has a great deal of investment experience in the capital markets and does not wish to answer questions about his tolerance for risk or his other holdings. Under Standard III(C), Suitability, Hull:

A)   may accept Peters’ account but may only manage his portfolio to a benchmark or index.

B)   is permitted to manage Peters’ account without any knowledge of his risk preferences.

C)   must decline to enter into an advisory relationship with Peters.

Correct answer is B)

Hull would not violate Standard III(C), Suitability, by managing Peters’ account without knowledge of his risk preferences. She made a reasonable inquiry into Peters’ investment experience, risk and return objectives, and financial constraints, as the Standard requires. If a client chooses not to provide some of this information, the member or candidate can only be responsible for assessing the suitability of investments based on the information the client does provide.

Q15. The Securities and Exchange Commission (SEC) sanctioned Stephen Rangen, a former broker, for unsuitable recommendations and excessive trading in several accounts.  His clients were unsophisticated, inexperienced individual investors with limited means.  As such, they relied heavily on Rangen’s advice and expected him to initiate any transactions in their respective accounts.  The SEC found that Rangen’s trading methods were contrary to his clients’ goals.  For example, he used margin accounts and concentrated their equity holdings in particular securities.  Rangen claimed that his actions were justified because his clients were aware of the risks. 

Which of the following statements best describes why Rangen’s argument, that his clients were aware of the risks, did NOT meet the requirements of the Code and Standards? Rangen failed to:

A)      deal fairly and objectively with his clients when taking investment action.

B)      make recommendations that were consistent with his clients' financial needs.

C)      disclose to his clients all matters that reasonably could be expected to impair his ability to make unbiased and objective recommendations.

Correct answer is B)

Rangen did not fulfill the obligation he assumed when he agreed to counsel these clients. That is, he did not make recommendations that were consistent with their financial needs. According to Standard III(C), Suitability, Rangen must “consider the appropriateness and suitability of investment recommendations or actions for each portfolio or client.” This is true even if his clients wanted to speculate and were aware of the risks.

Q16. Rangen bought U.S. Treasury strips and over-the-counter stocks that did not produce income as sought by his clients.  Rangen claimed that his actions were justified because his firm’s research department recommended the purchase of the  Treasury strips. Also, he claimed the stocks that he bought were all in the top-rated categories of his firm’s research division.  Which of the following statements best describes why Rangen’s arguments, in which he attempted to shift the blame to his employer, did NOT meet the requirements of the Code and Standards? 

A)      Rangen misrepresented the basic characteristics of the investments that he bought for his clients' accounts.

B)      Rangen's duty was to make only recommendations that were in the best interests of his clients.

C)      Rangen did not use reasonable care and judgment to achieve and maintain independence and objectivity in taking investment actions.

Correct answer is B)

Rangen cannot shift the blame to his employer. He had an obligation to consider not only his firm's recommendations, but also his clients' investment objectives and financial situations. He failed to consider relevant factors relating to his clients. Rangen violated Standard III(C) because he initiated investment actions without properly considering whether these actions were suitable to his clients' financial situations and investment objectives.

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