Reading - 2 - LOS a, b: Q16-Q20 black, class

管理员

16、June Carter passed Level III of the CFA examination in June but will not complete her work experience requirement until August of next year. Carter can state on her resume that she:

A)   passed Levels I, II, and III of the CFA examination.

B)   is a CFA in waiting.

C)   has earned the CFA charter as long as she is on track to complete her work experience.

D)   will be a CFA charterholder in August of next year as long as she is on track to complete her work experience.

 

17、Chuck Thomas is the trustee of a trust of which Jill Wyatt is the main beneficiary. Wyatt's husband is the president of a company. In emptying the recycling bin at home, Wyatt finds some papers that lead her to believe that her husband’s company will make a tender offer to acquire another firm. Wyatt takes the information to Thomas, who uses it to purchase shares of the company for the trust, but does not further disclose the information. Thomas has:

A)   violated the Standards concerning loyalty, prudence, and care.

B)   violated the Standards concerning material nonpublic information.

C)   violated the Standards concerning preservation of confidentiality.

D)   not violated any Standards.

 

18、While having a conversation with a prospective client, John Henry states that his performance across all of his past clients over the past five years was over 20 percent, which was 200 basis points higher than his benchmark. He tells the client that while the benchmark may rise or fall over time, his excess performance will remain consistent. Henry violated the Standards of Professional Conduct because:

A)   he cannot discuss prospective future performance in any manner.

B)   the statement of excess performance is misleading with respect to its certainty.

C)   he cannot discuss performance without clearly stating that the composite does not conform to PPS.

D)   he cannot discuss performance orally without first putting his numbers in writing.

 

19、Brenda Clark is an investment advisor. Two years ago Clark decided to stop calculating a return composite because of the time required to make those calculations. A prospective client asks Clark what she thinks her performance would have been over the past two years. Clark:

A)   can answer the question orally but cannot state the numbers in writing.

B)   cannot answer the question, nor can she discuss potential future market returns with the prospective client.

C)   cannot answer the question because it would be misleading.

D)   must surrender her Charter immediately.

 

20、A company has a defined benefit plan that is currently under-funded. The plan sponsor has instructed the portfolio manager of the plan to invest more aggressively to bring the funding level up to an adequate amount. Which of the following statements best describes the course of action the portfolio manager should take? The portfolio manager should:

A)   not invest more aggressively because this is not the method used to increase the funding level of a plan.

B)   invest more aggressively because this will increase the plan's assets faster as the stock market increases allowing the plan to become fully funded.

C)   not invest more aggressively since this may expose the plan to too much risk and may not be in the best interest of the plan's beneficiaries.

D)   invest more aggressively because his fiduciary duties lie with the plan sponsor.

管理员

16、June Carter passed Level III of the CFA examination in June but will not complete her work experience requirement until August of next year. Carter can state on her resume that she:

A)   passed Levels I, II, and III of the CFA examination.

B)   is a CFA in waiting.

C)   has earned the CFA charter as long as she is on track to complete her work experience.

D)   will be a CFA charterholder in August of next year as long as she is on track to complete her work experience.

The correct answer was A)

A candidate cannot use any form of the CFA designation until receiving her charter.

17、Chuck Thomas is the trustee of a trust of which Jill Wyatt is the main beneficiary. Wyatt's husband is the president of a company. In emptying the recycling bin at home, Wyatt finds some papers that lead her to believe that her husband’s company will make a tender offer to acquire another firm. Wyatt takes the information to Thomas, who uses it to purchase shares of the company for the trust, but does not further disclose the information. Thomas has:

A)   violated the Standards concerning loyalty, prudence, and care.

B)   violated the Standards concerning material nonpublic information.

C)   violated the Standards concerning preservation of confidentiality.

D)   not violated any Standards.

The correct answer was B)

Thomas cannot act or cause others to act on material nonpublic information.

18、While having a conversation with a prospective client, John Henry states that his performance across all of his past clients over the past five years was over 20 percent, which was 200 basis points higher than his benchmark. He tells the client that while the benchmark may rise or fall over time, his excess performance will remain consistent. Henry violated the Standards of Professional Conduct because:

A)   he cannot discuss prospective future performance in any manner.

B)   the statement of excess performance is misleading with respect to its certainty.

C)   he cannot discuss performance without clearly stating that the composite does not conform to PPS.

D)   he cannot discuss performance orally without first putting his numbers in writing.

The correct answer was B)

Guaranteeing performance on investments that are inherently volatile is misleading to clients.

19、Brenda Clark is an investment advisor. Two years ago Clark decided to stop calculating a return composite because of the time required to make those calculations. A prospective client asks Clark what she thinks her performance would have been over the past two years. Clark:

A)   can answer the question orally but cannot state the numbers in writing.

B)   cannot answer the question, nor can she discuss potential future market returns with the prospective client.

C)   cannot answer the question because it would be misleading.

D)   must surrender her Charter immediately.

The correct answer was C)

Any discussion of past performance would imply that Clark had made some calculations, which would be misleading. However, Clark need not calculate historical performance to be an advisor. She can also talk about her view on the future of capital markets.

20、A company has a defined benefit plan that is currently under-funded. The plan sponsor has instructed the portfolio manager of the plan to invest more aggressively to bring the funding level up to an adequate amount. Which of the following statements best describes the course of action the portfolio manager should take? The portfolio manager should:

A)   not invest more aggressively because this is not the method used to increase the funding level of a plan.

B)   invest more aggressively because this will increase the plan's assets faster as the stock market increases allowing the plan to become fully funded.

C)   not invest more aggressively since this may expose the plan to too much risk and may not be in the best interest of the plan's beneficiaries.

D)   invest more aggressively because his fiduciary duties lie with the plan sponsor.

The correct answer was C)

Standard III(A), Loyalty, Prudence, and Care, applies in this situation. According to this Standard, investment actions should be carried out for the sole benefit of the client and in a manner the manager believes to be in the best interest of the client. Here, the client is the plan beneficiaries, not the manager or the entity that hired the manager.