Q11. A member or candidate who suspects that a colleague is violating the law should most appropriately: A) consult with the company counsel to determine if in fact a law is being violated. B) report the illegal activity to CFA Institute Professional Standards Review Board for action. C) report all illegal activities to the appropriate regulatory agency. Q12. An analyst, who is a CFA charterholder, is working in a foreign country. Which of the following statements is TRUE? The analyst is: A) governed by the laws and standards of the country in which he is living and working. B) covered by the strictest of the following laws and rules: his own country's, the foreign country's or CFA Institute's Code and Standards. C) governed by CFA Institute's Code and Standards. Q13.Georgia Jones, CFA, is an analyst for Johnson, Thomas & Co. She also serves as an outside director for Dewey Manufacturing, Inc. In the course of her duties, she begins to believe that Dewey’s income statement for the most recent period may have been misstated. Georgia should do all of the following EXCEPT: A) inform the Securities and Exchange Commission. B) consult with Johnson, Thomas' legal counsel. C) consult with Dewey Manufacturing's legal counsel.
Q14.Joan Platt, CFA, operates an investment advisory service in New York but maintains an office in Xania. Xania recently established a stock market, which is not very efficient. None of the Xanian stocks trade in the U.S. market. Xania legally permits the use of material inside information. Platt believes that using inside information would help her compete against other Xanian investment advisors and also help some of her Xanian clients reach their investment objectives. Platt is considering adopting local investment practices in Xania. According to CFA Institute Standards of Professional Conduct, Platt may: A) use material inside information because Xania legally permits this practice. B) use material inside information, but only after notifying CFA Institute. C) not use material inside information. Q15.Benito Salvatore, CFA, is licensed in the established country of Oldworld but has clients and makes investments in the emerging county of Newworld. The regulations of Oldworld prohibit licensed investment professionals from taking gifts or gratuities in any amount from vendors or persons connected with potential investments. The laws of Newworld are silent on this issue. Unsolicited, Salvatore is offered a vase worth US $75 by a Newworld trust company and a bronze statue worth US $200 by a Newworld company that Salvatore is considering as a potential investment. Salvatore is: A) not permitted to accept either gift. B) permitted to accept both gifts. C) permitted to accept the vase but not the statue. |