bapswarrior

Liam McCoy has lunch with a wealthy client whose portfolio he manages. McCoy advises the client to double his current position in the JKM Corporation due to an anticipated increase in sales. In accordance with Standard (V) Investment Analysis, Recommendations and Actions, when McCoy returns to his office he should:

A) identify other clients for whom JKM may be a suitable investment and notify them immediately of his recommendation.

B) document the details of the conversation with the client with regard to his investment recommendation.

C) verify the suitability of the investment recommendation before placing the client’s order.

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Standard V(C) Record Retention requires that Members and Candidates document all recommendation and communications with clients. McCoy should document the details of the conversation, including any resulting investment decisions and/or actions. The suitability of the investment should have already been considered before the recommendation and McCoy should not execute the order until the client instructs him to. Identifying other clients for this investment would fall under Standard III(B) Fair Dealing.

bapswarrior

Which of the following is NOT part of the CFA Institute Code of Ethics. Members of CFA Institute will:

A) recommend investments that maximize returns for a given level of risk.

B) use reasonable care and exercise independent professional judgment.

C) strive to maintain and improve their competence and the competence of others in the profession.

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Standard of Professional Conduct III(C), not the Code of Ethics, requires that investments be appropriate and suitable.

bapswarrior

Which of the following is NOT part of the CFA Institute Code of Ethics. Members of CFA Institute will:

A) recommend investments that maximize returns for a given level of risk.

B) use reasonable care and exercise independent professional judgment.

C) strive to maintain and improve their competence and the competence of others in the profession.

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Standard of Professional Conduct III(C), not the Code of Ethics, requires that investments be appropriate and suitable.

bapswarrior

Which of the following is a component of the Code of Ethics?

A) Members shall not knowingly participate or assist in any violation of such laws, rules, or regulations.

B) Members shall not engage in any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects adversely on their honesty, trustworthiness, or professional competence.

C) Members shall use reasonable care and exercise independent professional judgment.

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This is a component of the Code of Ethics. Others pertain to the Standards of Professional Conduct.

bapswarrior

Which of the following is least likely a component of the Code of Ethics? In dealing with the public, clients, prospects, employers, employees, and fellow members, CFA Institute members shall act with:

A) humility.

B) integrity.

C) respect.

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Although acting with humility may be desirable, CFA Institute members are not required to do so. However, they should act in a manner that reflects credit on themselves and their professio

bapswarrior

According to the Code of Ethics, which of the following statements is NOT correct? CFA Institute members are required to:

A) use reasonable care and exercise independent professional judgment.

B) maintain and improve their competence and strive to maintain the competence of others in the profession.

C) comply with the CFA Institute Performance Presentation Standards.

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The CFA Institute-PPS are voluntary standards for the industry. Firms are not required to comply with these standards when presenting performance. The other statements are each components of the CFA Institute Code of Ethics.

bapswarrior

Which of the following is NOT an act explicitly referred to in the Code of Ethics?

A) Giving free introductory seminars on investing to the public.

B) Using reasonable care when making investment recommendations.

C) Improve professional competence.

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Although the Code says a member has obligations to the public, educating the general public for whatever reason is not implied.

bapswarrior

The first component of the Code of Ethics does NOT explicitly say that a CFA Institute member will act with which of the following?

A) Integrity.

B) Solemnity.

C) Competence.

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Component one mentions all of these except sole

bapswarrior

Which of the following is a component of the Code of Ethics? CFA Institute members shall:

A) strive to maintain and improve their competence and the competence of others in the profession.

B) act for the benefit of their clients and place their clients' interests before their own.

C) disclose to their employer all matters that reasonably could be expected to interfere with their duty to their employer or ability to make unbiased and objective recommendations.

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Striving to maintain and improve their competence and the competence of others in the profession is one of the components of the Code of Ethics, whereas the other statements are part of the Standards of Professional Conduct.

bapswarrior

In dealing with the public and others, the CFA Institute Code of Ethics indicates that CFA Institute members will act with:

A) integrity, competence, and respect.

B) confidence, knowledge, and high ethical standards.

C) honesty, professionalism, and goodwill.

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Integrity, competence, and respect are included in the first component of the Code of Ethics.