Q6. With regard to the Chandler portfolio, Lindquist violated:

A)   Standard III(C): Suitability, but not Standard III(A): Loyalty, Prudence, and Care.

B)   neither Standard III(C): Suitability, nor Standard III(A): Loyalty, Prudence, and Care.

C)   Standard III(A): Loyalty, Prudence, and Care, but not Standard I(D): Misconduct.

Q7. With regard to Lindquist’s seat on the board of Western Inns, he violated:

A)   no standards.

B)   Standard VI(A): Disclosure of Conflicts, but not Standard IV(B): Additional Compensation Arrangements.

C)   Standard VI(A): Disclosure of Conflicts, and Standard IV(B): Additional Compensation Arrangements.

Q8. Which of the following standards is not violated in Lindquist’s version of the Midwestern model?

A)   Standard I(C): Misrepresentation.

B)   Standard V(A): Diligence and Reasonable Basis.

C)   Standard IV(C): Responsibilities of Supervisors.

答案和详解如下：

Q6. With regard to the Chandler portfolio, Lindquist violated:

A)   Standard III(C): Suitability, but not Standard III(A): Loyalty, Prudence, and Care.

B)   neither Standard III(C): Suitability, nor Standard III(A): Loyalty, Prudence, and Care.

C)   Standard III(A): Loyalty, Prudence, and Care, but not Standard I(D): Misconduct.

Correct answer is B)

Lindquist’s actions conform to Standard III(C): Suitability, Standard V(A): Diligence and Reasonable Basis, and Standard III(A): Loyalty, Prudence, and Care. Lindquist must take into account the risk level of the portfolio in its entirety, not individual securities within the portfolio. Although purchasing index put options is, by itself, inherently risky, in the context of a diversified portfolio it may well conform to a conservative client’s risk tolerance by hedging some of the risk of owning equities. Lindquist may rightly determine that such a strategy is consistent with Chandler’s investment policy statement. If properly constructed originally and properly explained to the client, no change in the investment policy statement is needed.

Q7. With regard to Lindquist’s seat on the board of Western Inns, he violated:

A)   no standards.

B)   Standard VI(A): Disclosure of Conflicts, but not Standard IV(B): Additional Compensation Arrangements.

C)   Standard VI(A): Disclosure of Conflicts, and Standard IV(B): Additional Compensation Arrangements.

Correct answer is C)

Under Standard IV(B), Lindquist is required to disclose in writing to his employer any benefits (monetary or non-monetary) he receives for services that are in addition to compensation or benefits provided by his employer. An informal discussion with his supervisor does not conform to the requirement that the notice be in writing. Under Standard VI(A), he is also required to disclose the arrangement to his clients because a directorship is a conflict of interest that could reasonably be expected to impair his objectivity. He must do so even if he currently holds no shares of Western in his clients’ portfolios because it may impair his objectivity in recommending the stock for inclusion in clients’ portfolios in the future. Lindquist violated Standard I(B) because clients could reasonably assume his objectivity is in question.

Q8. Which of the following standards is not violated in Lindquist’s version of the Midwestern model?

A)   Standard I(C): Misrepresentation.

B)   Standard V(A): Diligence and Reasonable Basis.

C)   Standard IV(C): Responsibilities of Supervisors.

Correct answer is A)

The ad hoc model is not part of the formal research process and does not formulate an adequate basis for a recommendation. Lindquist’s recommendations are not supported by appropriate research because Lindquist’s version of the model obtains different results than the original model. These discrepancies have not been adequately researched. Lindquist’s supervisor is responsible for policing the analyst’s research. The fiduciary-duties standard covers a lot of ground, and it would not be hard to argue that by misrepresenting his research as that of a company standard, he is breaching a duty to the firm’s clients, who expect their investments to be chosen by the “Midwestern Model.” The plagiarism standard is not relevant here, because Lindquist has permission to use the model, and is not misrepresenting the work of others as his own work. In fact, Lindquist’s actions represent the opposite of plagiarism, pawning off his own work as the work of others.