Q6. A given client has specified that her primary concern is preservation of principal. Last year the value of this client’s account has declined by 8 percent. Which of the following statements is TRUE? This: A) does not constitute a violation of the manager's fiduciary responsibility, regardless of the nature of the investment policy statement for the account. B) constitutes a violation of the manager's fiduciary responsibility regardless of whether the manager deviated from a properly constructed investment policy for this account. C) constitutes a violation of the manager's fiduciary responsibility only if the manager deviated from a properly constructed investment policy for this account.
Q7. At the time a client relationship is established, assume that an appropriate investment policy statement has been developed. Which of the following statements is CORRECT regarding the Prudent Investor Rule (PIR)? The PIR requires that the fiduciary: A) periodically review the client circumstances and make appropriate changes in the investment policy as warranted. B) develop an appropriate investment policy statement when the client relationship is established and update the investment policy only as is deemed necessary by the fiduciary. C) review the client circumstances and make changes when asked to do so by the client and make changes in the investment policy as warranted.
Q8. Erica Barnes, CFA, is a trustee for a pension fund. Which of the following is an example of Barnes' failure to follow general fiduciary standards set forth in the new Prudent Investor Rule? She recommends the fund should:
A) hire an outside manager when they lack the in-house expertise to manage a small cap portfolio. B) consider the need for future growth while maintaining current income obligations. C) hire her relative to manage a new high yield portfolio.
Q9. Miles Turner, a CFA candidate, oversees a union pension fund. He got this job because of family connections as he is just learning the investment management business. Subsequently, he realizes that he is not ready to make the necessary decisions about the fund. He hires several portfolio managers. Under the Prudent Investor Rule, Turner is: A) not in compliance because he did not put in writing that funds were managed in-house prior to the hiring of outside managers. B) in compliance. Delegation of authority is allowed. C) not in compliance. Delegation of authority is not allowed.
Q10. A trustee must adhere to the following general fiduciary standards EXCEPT:
A) caution. B) skill. C) partiality.
| 
发表于 2009-1-8 11:33
| 
