土豆妮

Steve Bishop is a portfolio manager with Bradshaw Asset Management. He has received a request from the Gail Foundation, one of his clients, to review Bradshaw's soft dollar policy, since Bradshaw claims to comply with the CFA Institute Soft Dollar Standards. Bishop must be prepared to present the client with all of the following EXCEPT:

A) the aggregate percentage on Bradshaw's brokerage derived through client-directed brokerage.

B) the total amount of Gail's commissions generated through soft dollar arrangements.

C) the total amount of brokerage paid by Bradshaw to each broker.

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The disclosure of the total amount of brokerage paid by Bradshaw is recommended but not required, and there is no mention of disclosure of brokerage paid to each broker.

土豆妮

Which of the following is NOT one of the basic fiduciary duties? To:

A) maintain knowledge of and comply with all applicable laws.

B) place their client’s interest before their own.

C) exercise prudent judgment.

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CFA Institute members have a duty to maintain knowledge and to comply with all applicable laws, but this is Standard I(A), Knowledge of the Law, not a fiduciary duty.

土豆妮

Which of the following statements about soft dollars is TRUE?

A) Fiduciaries must disclose actual, but not potential, conflicts of interest.

B) Items purchased with soft dollars must provide a benefit to the client.

C) Items purchased with soft dollars must provide a benefit to the firm.

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Items purchased with soft dollars must provide a benefit to the client. If this benefit is less than 100 percent to the client, soft dollars can only be used to purchase the item in proportion to the benefit derived by the client.

土豆妮

Carl Johnson, a large equity client of Madison Investment Advisors, directs Madison to pass along old copies of any research purchased with soft dollars generated by trades in his account to his friend Jacob Wisnewski. Madison receives about ten such reports per year, and, after these have been reviewed in the context of their relevance to Johnson’s account, they are forwarded on to Wisnewski. With regard to this procedure, which of the following statements is TRUE? The research:

A) provides a benefit to Johnson and may be released to Wisnewski with the permission of the source.

B) does provide a benefit to Johnson but may not be released to Wisnewski with or without the permission of the source.

C) does not provide a benefit to Johnson but may be released to Wisnewski with the permission of the source.

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Since the research received is relevant to and is used for the benefit of Johnson, there is nothing inherently wrong with passing the reports to Wisnewski unless precluded from doing so by the provider of the research.

土豆妮

Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Investment managers must:

A) seek the best price and execution.

B) avoid agency relationships.

C) minimize transactions costs.

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Investment managers must seek the best price and execution.

土豆妮

Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Investment managers must:

A) seek the best price and execution.

B) avoid agency relationships.

C) minimize transactions costs.

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Investment managers must seek the best price and execution.

土豆妮

Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Investment managers must:

A) seek the best price and execution.

B) avoid agency relationships.

C) minimize transactions costs.

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Investment managers must seek the best price and execution.

土豆妮

Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Investment managers must:

A) seek the best price and execution.

B) avoid agency relationships.

C) minimize transactions costs.

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Investment managers must seek the best price and execution.

土豆妮

Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Investment managers must:

A) seek the best price and execution.

B) avoid agency relationships.

C) minimize transactions costs.

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Investment managers must seek the best price and execution.

土豆妮

Which of the following is one of the four requirements for meeting fiduciary obligations with regard to soft dollar arrangements? Items purchased with soft dollars must:

A) provide a benefit to the firm.

B) provide a benefit to the client.

C) provide at least 50% of their benefits to the client.

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Items purchased with soft dollars must provide a benefit to the client.