Ethics -- I(B) - Travel Expenses states, Travel, example, standard

BC_MBA_student

....OK, what's the deal with this standard?...Is it a violation or not to accept accommodations?...CFAI text only says NOT NECESSARILY a violation, but their example clearly states that the hotel is the ONLY accomodation in the area

giorgio10

DB-

I'm doing this as best I can from memory, so cut me some slack. Accomodations and travel can indeed be accepted, but it must be REASONABLE and not excessive. Unfortunately, as you mention, the CFAI text isn't super concrete as to what this means.

The Schweser examples stressed that the most common way of delineating 'reasonable' from 'excessive' was the fact that the analyst was headed to an area that was remote and the lodgings were a budget hotel type of place.

Luckily, for every mock, Qbank, and CFAI text question I encountered on this was pretty cut and dried. Going to Dead Raccoon, Michigan and staying in "Ye Olde Budget Motel"? FINE BY CFAI, LIVE IT UP AND ORDER ROOM SERVICE. Going to Tokyo and staying at the Ritz? NO COMP FOR YOU.

firat

...that is definitely the weakest question of ALL time! What on earth does this test us on? They mention numerous times that it is important to even avoid the impression of having one's I&O compromised!

Thanks for the answer though super...

huangxiaoxie

i thought the answer would be... "no violation?" since the place is remote and the lodging was "moderately priced hotel" something like that?

madaochenggong

Absolutely horrible question...no 2 ways about it...

chandsingh

One of CFA's EOC answers says best practice for analysts is to pay everything by themselves. What it does not say is whether it is a violation to do otherwise.

xilige

CFA's testing your judgemental ability here. While accepting the moderately priced loding is frowned upon, it is clearly not a violation, as many example questions have stated.

The problem clear asks whether there were any VIOLATIONS not what the best course of action would be for the analyst.

Kapie

listen....if they would have put more than 1 line that clearly states this is not a violation in the nearly 500 or so pages in the ethics section, rather than ..."this may not be a violation" in one case example ...I would have nailed this Q...in the end what does this teach us? There had to be 20+ references to IPO's and private placements that would have been equally challenging, and would have rewarded those who paid close attention to detail...it's a joke and a shame IMO...you are probably better off NOT studying, and answering that question, then if you actually read the text...I was definitely under the impression that "best practices" actually had some meaning

5566

There were a lot of borderline questions on Ethics. It was pretty rough. For this one though, I put no violation.

Swanand

Required vs. recommended, always a blurry distinction and the source of most of my errors on these questions.