Q1. While trading on behalf of a pension account, an analyst receives special research reports from the brokerage firm with whom she is doing the trades. Such an activity is:

A)   a violation of only The Code of Ethics.

B)   not in itself a violation of Standard III(A), Loyalty, Prudence, and Care, nor the Code of Ethics.

C)   a violation of both Standard III(A), Loyalty, Prudence, and Care, and the Code of Ethics.

Q2. An independent analyst has only one client. One of the client’s largest holdings is a brokerage firm. Because of the large holding by his client, the brokerage firm recently began allowing the analyst to tap into the firm’s computer network to use the firm’s research facilities. This is allowable as long as the analyst:

A)   uses the resources to help manage the client's account.

B)   does both of the actions listed here.

C)   discloses the relationship to the client.

Q3. Tony Calaveccio, CFA, is the manager of the TrustCo Small Cap Venture Fund in Toronto. He places trades for the fund with River City Brokerage. River City provides Calaveccio with soft dollars to purchase research. River City also deals in municipal bonds, some of which Calaveccio holds in his personal portfolio. He periodically uses the soft dollars to request research reports on various small cap stocks and also on the status of the municipal bond market and issues that he holds. These actions are:

A)   not in violation of the Code and Standards.

B)   in violation of his fiduciary duties regarding the municipal bond research but not so regarding the research on the small cap issues.

C)   in violation of his fiduciary duties regarding both the small cap research and the municipal bond research.

Q4. Which of the following is a possible breach of fiduciary duties by a CFA Institute member who manages assets on behalf of a client?

A)   Using directed brokerage.

B)   Voting all proxies of stocks the client owns.

C)   Neither of these breach fiduciary duties.

Q5. Tony Calaveccio, CFA, is the manager of the TrustCo Small Cap Venture Fund in Toronto. He places trades for the fund with Canadian Brokerage. Canadian provides Calaveccio with soft dollars to purchase research. He uses these soft dollars to get research reports from Canadian's research department regarding the issues currently held in the small cap portfolio, and also for firms he is contemplating adding to the portfolio. By using soft dollars in this manner, Calaveccio has:

A)   violated the Code and Standards by acquiring research on currently held issues and by acquiring research on issues contemplated for purchase.

B)   violated the Code and Standards by acquiring research on issues contemplated for purchase but not by acquiring research on currently held issues.

C)   not violated the Code and Standards.

答案和详解如下：

Q1. While trading on behalf of a pension account, an analyst receives special research reports from the brokerage firm with whom she is doing the trades. Such an activity is:

A)   a violation of only The Code of Ethics.

B)   not in itself a violation of Standard III(A), Loyalty, Prudence, and Care, nor the Code of Ethics.

C)   a violation of both Standard III(A), Loyalty, Prudence, and Care, and the Code of Ethics.

Correct answer is B)         

An analyst can receive research from a brokerage firm with whom she is trading on behalf of a client. The analyst should inform the client of the arrangement. The client is more likely to violate Standard III(A) by obtaining non-research services or, worse yet, personal benefits from the brokerage firm.

Q2. An independent analyst has only one client. One of the client’s largest holdings is a brokerage firm. Because of the large holding by his client, the brokerage firm recently began allowing the analyst to tap into the firm’s computer network to use the firm’s research facilities. This is allowable as long as the analyst:

A)   uses the resources to help manage the client's account.

B)   does both of the actions listed here.

C)   discloses the relationship to the client.

Correct answer is B)         

According to Standard III(A), Loyalty, Prudence, and Care, the analyst must put the client first and inform the client of any possible conflicts of interest. The analyst must channel any benefits derived from his service to the client, back to the client, and inform the client of the benefits.

Q3. Tony Calaveccio, CFA, is the manager of the TrustCo Small Cap Venture Fund in Toronto. He places trades for the fund with River City Brokerage. River City provides Calaveccio with soft dollars to purchase research. River City also deals in municipal bonds, some of which Calaveccio holds in his personal portfolio. He periodically uses the soft dollars to request research reports on various small cap stocks and also on the status of the municipal bond market and issues that he holds. These actions are:

A)   not in violation of the Code and Standards.

B)   in violation of his fiduciary duties regarding the municipal bond research but not so regarding the research on the small cap issues.

C)   in violation of his fiduciary duties regarding both the small cap research and the municipal bond research.

Correct answer is B)         

The issue at hand is the member's fiduciary responsibilities in handling "soft dollars" which are technically the property of the client. Standard III(A), Loyalty, Prudence, and Care, delineates the member's fiduciary responsibilities with regards to soft dollars. Since municipal bond research is clearly not relevant to the Small Cap Fund holders, he is clearly using the soft dollars to obtain research for his personal benefit and is in violation of the Standard.

Q4. Which of the following is a possible breach of fiduciary duties by a CFA Institute member who manages assets on behalf of a client?

A)   Using directed brokerage.

B)   Voting all proxies of stocks the client owns.

C)   Neither of these breach fiduciary duties.

Correct answer is B)         

Proxies have economic value to the client. To comply with Standard III(A), the analyst is obligated to vote proxies in an informed and responsible manner. A cost benefit analysis may show that voting all proxies may not benefit the client, so voting proxies may not be necessary in all instances. Directed brokerage occurs when the client requests that a portion of the client's brokerage be used to purchase services that directly benefit the client. Although, this may prevent best execution, it does not violate the Standards as it was directed by the client, not the brokerage firm.

Q5. Tony Calaveccio, CFA, is the manager of the TrustCo Small Cap Venture Fund in Toronto. He places trades for the fund with Canadian Brokerage. Canadian provides Calaveccio with soft dollars to purchase research. He uses these soft dollars to get research reports from Canadian's research department regarding the issues currently held in the small cap portfolio, and also for firms he is contemplating adding to the portfolio. By using soft dollars in this manner, Calaveccio has:

A)   violated the Code and Standards by acquiring research on currently held issues and by acquiring research on issues contemplated for purchase.

B)   violated the Code and Standards by acquiring research on issues contemplated for purchase but not by acquiring research on currently held issues.

C)   not violated the Code and Standards.

Correct answer is C)         

The issue at hand is the member's fiduciary responsibilities in handling "soft dollars" which are the property of the client (in this case the holders of the shares of the Small Cap Venture Fund). Standard III(A) Loyalty, Prudence, and Care delineates the member's responsibilities. Since he is clearly using the soft dollars to obtain research that is directly applicable to his professional duties, there is no violation of the Standard.

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