Reading 2-II: Standards of Professional Conduct & Guida class, statements, following, white, black

mayanfang1

Q22. Regarding non-public information, which one of the following statements is FALSE?

A)   An analyst may use some types of non-public information.

B)   A member can be summarily suspended for having received material non-public information.

C)   Disclosing material non-public information would have an impact on the price of a security or be of interest to a reasonable investor.

Q23. An analyst provides services for a charitable organization and in return gets free membership in the organization. Part of her job is to manage the liquid assets of the organization, and those assets include stocks. Her supervisor in the organization calls her   and tells her to buy a certain stock for the portfolio based upon insider information from a board member in the organization. The analyst objects, but the supervisor says this is what they have always done and sees no reason for changing now. The analyst complies with the request. With respect to Standards IV(A), Loyalty to Employer, and II(A), Material Nonpublic Information, the analyst violated:

A)   both Standards IV(A) and II(A).

B)   only Standard IV(A) requiring duty of loyalty.

C)   only Standard II(A) that prohibits insider trading.

mayanfang1

答案和详解如下：

Q22. Regarding non-public information, which one of the following statements is FALSE?

A)   An analyst may use some types of non-public information.

B)   A member can be summarily suspended for having received material non-public information.

C)   Disclosing material non-public information would have an impact on the price of a security or be of interest to a reasonable investor.

Correct answer is B)

All of these are true except that a member can be suspended for having received material non-public information. The member can receive such information as part of their regular duties or by accident. Neither is punishable in and of itself, and penalties only apply if the member trades or causes others to trade on the information. The member may have certain duties, such as trying to disseminate the information after receiving it. An analyst may use nonmaterial non-public information.

Q23. An analyst provides services for a charitable organization and in return gets free membership in the organization. Part of her job is to manage the liquid assets of the organization, and those assets include stocks. Her supervisor in the organization calls her   and tells her to buy a certain stock for the portfolio based upon insider information from a board member in the organization. The analyst objects, but the supervisor says this is what they have always done and sees no reason for changing now. The analyst complies with the request. With respect to Standards IV(A), Loyalty to Employer, and II(A), Material Nonpublic Information, the analyst violated:

A)   both Standards IV(A) and II(A).

B)   only Standard IV(A) requiring duty of loyalty.

C)   only Standard II(A) that prohibits insider trading.

Correct answer is C)

An employee/employer relationship does not necessarily mean monetary compensation for services. Complying with the request is a violation of II(A) which prohibits trading on insider information.  Standard IV(A) Loyalty deals with going into business for yourself, leaving an employer and continuing to act in the employer's best interest until their resignation becomes effective, and whistleblowing which means that the member's interests and their firm's interests are secondary to protecting the integrity of capital markets and the interests of the clients.

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