More CFAI Ethics trends, Investment, government, following, regarding

hinsafdar

Which of the following is LEAST LIKELY to be considered a “material” piece of information regarding a company:
a. Loss of a customer representing a significant portion of a company’s gross sales.
b. Changes in company management.
c. A former CFO of the company predicting long-term decline in the company’s stock.
d. A government report of economic trends affecting a company.
Gaines, a financial analyst for Skinner Investment Counseling, is told by the investor relations representative for Firebird Avionics, a major aircraft parts manufacturer, that the firm is in the final stages of building a new fuel efficient jet engine. This information is divulged by Firebird at the most recent quarterly conference call for analysts. Gaines uses this information along with other information he obtained from the company and distributed to the public in a research report that includes a “buy” recommendation for Firebird stock. Which of the following statements is CORRECT:
a. Gaines violated the Code and Standards because he has a material misrepresentation in his report.
b. Gaines violated the Code and Standards because he used material nonpublic information.
c. Gaines’ actions did not violate the Code and Standards.
d. Gaines violated the Code and Standards because he failed to separate opinion from fact.
Sheramy, a portfolio manager for Woodbridge Investment handles the account of Zamborino, a client of the firm. Zamborino offers to pay Sheramy a $100,000 bonus over and above her compensation from Woodbridge Investments if Sheramy achieves an 18 percent annual return for Zamborino’s account. Sheramy:
a. Can accept this offer as long as she discloses the arrangement to her employer.
b. Can accept this offer and disclose the bonus to her employer only if she actually achieves the performance target and receives the gift.
c. Cannot accept this offer because it will interfere with her independence and ability to be objective regarding investment decisions and recommendations.
d. Cannot accept this offer because it is outside of her primary employment relationship with Woodbridge Investments.
Which of the following is LEAST LIKELY to help an investment professional ensure that an investment is suitable for a particular client:
a. Gathering information about the client’s financial circumstances at the outset of the relationship.
b. Drafting a written investment performance statement (IPS) that addresses the client’s risk tolerance, return requirements, and investment constraints.
c. Obtaining information on that part of the client’s portfolio managed by the investment professional and not on any assets invested elsewhere, as those are out of the control of the investment manager.
d. Updating the client’s financial circumstances and IPS on a regular basis.
Reese is portfolio manager for several clients. She uses the work of the highly skilled research analysts in her firm to support her investment decisions. Reese:
a. Complied with the Code and Standards.
b. Violated the Code and Standards because she did not independently verify the research herself.
c. Violated the Code and Standards because she did not exercise diligence in making her investment decisions.
d. Violated the Code and Standards because she was unfamiliar with the processes and procedures used by the analysts in coming to their conclusions.

Walex

BUMP
1) C
2) C (but this makes me nervous, the wording of “most recent conference call” can be taken two ways. I am assuming the recent conference call proceeded the investor relations disclosure)
3) C
4) C
5) C (but possibly D, I always get this question wrong)
That is a lot of c’s

Iginla2010

C
C
A
C
A