Q14. Carol Hull, CFA, is an investment advisor whose prospective client, Frank Peters, presents special requirements. To construct an investment policy statement for Peters, Hull inquires about Peters’ investment experience, risk and return objectives, and financial constraints. Peters states that he has a great deal of investment experience in the capital markets and does not wish to answer questions about his tolerance for risk or his other holdings. Under Standard III(C), Suitability, Hull: A) may accept Peters’ account but may only manage his portfolio to a benchmark or index. B) is permitted to manage Peters’ account without any knowledge of his risk preferences. C) must decline to enter into an advisory relationship with Peters.
Q15. The Securities and Exchange Commission (SEC) sanctioned Stephen Rangen, a former broker, for unsuitable recommendations and excessive trading in several accounts. His clients were unsophisticated, inexperienced individual investors with limited means. As such, they relied heavily on Rangen’s advice and expected him to initiate any transactions in their respective accounts. The SEC found that Rangen’s trading methods were contrary to his clients’ goals. For example, he used margin accounts and concentrated their equity holdings in particular securities. Rangen claimed that his actions were justified because his clients were aware of the risks. Which of the following statements best describes why Rangen’s argument, that his clients were aware of the risks, did NOT meet the requirements of the Code and Standards? Rangen failed to: A) deal fairly and objectively with his clients when taking investment action. B) make recommendations that were consistent with his clients' financial needs. C) disclose to his clients all matters that reasonably could be expected to impair his ability to make unbiased and objective recommendations.
Q16. Rangen bought U.S. Treasury strips and over-the-counter stocks that did not produce income as sought by his clients. Rangen claimed that his actions were justified because his firm’s research department recommended the purchase of the Treasury strips. Also, he claimed the stocks that he bought were all in the top-rated categories of his firm’s research division. Which of the following statements best describes why Rangen’s arguments, in which he attempted to shift the blame to his employer, did NOT meet the requirements of the Code and Standards? A) Rangen misrepresented the basic characteristics of the investments that he bought for his clients' accounts. B) Rangen's duty was to make only recommendations that were in the best interests of his clients. C) Rangen did not use reasonable care and judgment to achieve and maintain independence and objectivity in taking investment actions.
[此贴子已经被作者于2009-1-9 15:55:00编辑过] | 
发表于 2009-1-8 15:32
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