Reading 9: Changing Investment Objectives-LOS b 习题精选 2011, Investment, investment, following, manager

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Session 2: Ethical and Professional Standards: Application
Reading 9: Changing Investment Objectives

LOS b: Discuss appropriate actions needed to ensure adequate disclosure of the investment process.

 

 

A manager of pooled funds must do all of the following to remain in compliance with the Standards EXCEPT:

A) Disclose basic security selection processes.

B) Notify potential investors of any changes in investment policy.

C) Print the investment policy statement in all quarterly reports.

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There is no requirement to include the investment policy statement in all quarterly reports.

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An internal audit of Vega Fund has determined that the fund is out of compliance with its investment policy statement as disclosed in the prospectus. Vega should do all of the following EXCEPT:

A) revise the investment process in order to be consistent with the investment policy statement.

B) seek authorization should it be determined that the investment policy requires alteration.

C) revise the internal audit procedure to allow such occurrences in the future.

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It would appear that the internal audit procedure has effectively uncovered a compliance violation, and that is an objective of the procedure. Hence, there is no need to revise the internal audit procedure.

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A manager of pooled funds must do all of the following to remain in compliance with the Standards EXCEPT:

A) seek authorization for any proposed changes.

B) seek authorization for any trade that involves more than 1 percent of the fund's assets.

C) disclose portfolio construction processes.

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There is no requirement to seek authorization for trades on the basis of size.

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In order to remain in compliance when managing private client accounts, members must do all of the following EXCEPT:

A) Conduct regular reviews of client circumstances.

B) Use a risk-factor model to assess the client's risk tolerance.

C) Seek authorization for changes in investment policy.

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There is no requirement to use a specific model in order to assess and document a client’s risk tolerance. Risk tolerance is more likely to be addressed implicitly in the asset allocation guidelines that are established and updated based upon client circumstances.

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Wanda Brunner, CFA, is preparing for her first meeting with the Johnsons—her firm’s newest clients. She makes notes regarding disclosure of the investment process. These notes most likely include reminders to:

A) notify her supervisors of any potential change in the security selection and portfolio construction process.

B) adequately disclose the basic security selection and portfolio construction process.

C) anticipate changes in her clients’ investment objectives that could cause them to leave her firm.

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Wanda should adequately disclose the basic security selection and portfolio construction process. Wanda should generally stick with the stated investment strategy in the IPS, notify clients and prospective clients of any potential change in the security selection and portfolio construction process, and secure documentation of authorization for proposed changes.