Reading 2-III: Standards of Professional Conduct & Guida

class, required, following, likely

Q1.Which of the following is least likely required of fiduciaries who are responsible for pension plans?

A) Supporting the sponsor's management during proxy fights.

B) Judging investments in the context of the total portfolio.

C) Acting solely in the interest of plan participants.

Q2.All of the following are required by fiduciaries under Standard III(A), Loyalty, Prudence, and Care, EXCEPT:

A) support the sponsor's management during proxy fights.

B) act solely in the interest of the ultimate beneficiaries.

C) place the client’s interest before the employer’s interest.

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 both the small cap research and the municipal bond research.

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

Q4.In order to comply with Standard III(A), Loyalty, Prudence, and Care, an analyst needs to:

A) perform both of the actions listed here.

B) liquidate his personal holdings of all stocks that his client owns.

C) comply with applicable fiduciary duty.

Q5.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) Neither of these breach fiduciary duties.

C) Voting all proxies of stocks the client owns.