Reading 2-I: Standards of Professional Conduct & Guida

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16、The SEC’s new stock-trading rule has just gone into effect. The SEC will give brokers a 10-day grace period, during which violators of the rule will be immediately notified and given a chance to remedy their situation to comply with the new rule. If a CFA Institute member unknowingly violates the rule and then remedies the situation within the 10-day grace period, has the member violated Standard I(A)?

A) Yes, because breaking a rule of the SEC has no remedy for a member of CFA Institute.

B) Yes, because the member did not maintain knowledge and know of the rule.

C) No, because the member remedied the situation.

D) No, because the member unknowingly broke the rule.

17、The Standards of Professional Conduct explicitly outlines responsibilities to four groups. Which of the following is NOT a group mentioned in that list?

A) The profession.

B) Employers.

C) The investing public.

D) The Federal Reserve.

18、For an employee with the CFA designation who works for a firm, which of the following is NOT necessary to meet the requirements of the Code and Standards?

A) Deliver a copy of the Code and Standards to their employer.

B) It is recommended that their employer is aware of the Code and Standards.

C) Recommend notifying their employer of their responsibility to follow the Code and Standards.

D) Recommended that their immediate supervisor is aware of the Code and Standards.

19、A CFA Institute member works for Secure Securities, Inc., and plays rugby on the firm’s rugby team. Secure Securities’ team recently played the team of a rival firm. During the game, a fight broke out and the CFA Institute member was the instigator, but no one was seriously hurt. Is this a violation of I(A) concerning maintaining knowledge and complying with laws, rules, and regulations?

A) Yes, because the member could have hurt someone in the fight.

B) No, because a fight at a rugby game is not a professional activity.

C) No, because no one was seriously hurt.

D) Yes, because the member is bound by the Code of Ethics.

20、A CFA Institute member conscientiously maintains records of changes in security regulations. The member notices that his colleagues do NOT, and does NOT say anything. Is this a violation of Standard I(A)?

A) Yes, and the member should disassociate from these colleagues.

B) No, as long as the colleagues do not violate the new rules.

C) No, as long as he allows the colleagues access to his files.

D) Yes, because the member is bound by the Code of Ethics.