got 3 questions left on my list create, advice, because, gift

Wendy01

1. If # of contracts is 915.32, do you round down to 915 or round up to 916?

2. Passive / Replicating Index: Expensive to initially create, but then transaction costs are low because the only time you need to create transaction costs is to reinvest dividends. True?

3. Disclose vs Written Consent: anyone have any final advice here? I know if it is from a client, you can disclose a gift for past performance but ask for consent for a gift that is contingent on future performance. I think if it from a nonclient entity, you need written consent for past gifts but may not accept anything that is contingent on future events.

jmh530

I don't think they'll penalise for 120 or 119. The whole technique is highlighted in the text as being approximate. Just write 119.69 ~ 120 make it clear where you came from. Job done.

mik82

1. Round to nearest, this case #915
2. True, BUT you incur costs upon index reconstitution, index rebalancing and also for dividend and coupon reinvestment
2. Correct about Client ex-post and ex-ante gifts. Any non-client gifts must not even have hint of tainting Independence and Objectivity, and should be pre-approved and disclosed

former

ok also on question 2: look at cfai volume 4 page 157.

119.69 --> 119 contracts

NakedPuts2011

so if broker says i'll give you world cup tickets if you send me business from these clients obviously thats disallowed even if you disclose--employer would say no way.

but what if broker says, thanks for sending me business, here is a weekend stay in vegas for your and your wife. i would assume you should disclose?

canadiananalyst

1. round nearest, so 915
2. true, or if it's a bond index, and a bond matures you have to reinvest that.
3. don't have a full answer but firstly it's about value of gift, then client gifts are ok if interests are aligned, gifts from brokers trying to bribe you aren't.