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标题: Reading 9: Changing Investment Objectives-LOS a 习题精选 [打印本页]

作者: 土豆妮    时间: 2011-3-1 15:41     标题: [2011]Session 2-Reading 9: Changing Investment Objectives-LOS a 习题精选

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

LOS a: Critique the disclosure of investment objectives and basic policies and determine whether they comply with the CFA Institute Standards of Professional Conduct.

 

 

Wanda Brunner, CFA, is reviewing a draft fund prospectus for her new “Leveraged Long Coffee” (LLC), a closed-end fund. LLC uses a of combination fundamental and technical trading models to evaluate individual securities. She notes the LLC prospectus has several disclosures which cause her to worry that prospective clients will avoid her fund.

Which of the following standards will most likely be violated by distribution of the prospectus?

A)
Standard III(C) Duties to Clients: Suitability because it misleads the reader as to the process by which securities are selected.
B)
Standard III(C) Duties to Clients: Suitability because the fees are exorbitant.
C)
Standard III(C) Duties to Clients: Suitability because the fund can hold an excessive portion of the portfolio in non-core assets.


 

LLC must adequately disclose the basic security selection and portfolio construction process, and the portfolio manager recommendations and investment actions must be consistent with the stated objectives and constraints of the fund. By failing to acknowledge the fund’s dependence on technical trading, the fund fails to meet this standard.


作者: 土豆妮    时间: 2011-3-1 15:42

BlueRock Fund uses a proprietary asset selection model that it believes gives the firm a competitive advantage. The model is applied to a universe of all small-cap domestic equities and all publicly-traded corporate bonds. The asset allocations generated by this model range from +200 percent in small-cap equities/-100 percent in bonds to +200 percent in bonds/-100 percent in small-cap equities. Since the fund can invest in both equities and bonds, it is classified as a balanced fund. In the prospectus BlueRock describes the fund’s investment policy as “a balanced fund, with 50 percent of the assets invested in bonds and 50 percent in equities, on average.” On this basis, BlueRock is:

A)
not in violation of any CFA Institute Standard.
B)
in violation of CFA Institute Standards concerning the disclosure of security selection and portfolio construction processes.
C)
in violation of the CFA Institute Standard concerning Fiduciary Duty.


Clearly, the risk profile of this fund is much different from a typical balanced fund. In fact, it could be effectively described as a hedge fund if +200/-100 allocations are typical. BlueRock is in violation of the Standard concerning disclosure of security selection and portfolio construction processes.


作者: 土豆妮    时间: 2011-3-1 15:47

Adequate investment policy disclosure typically means clearly identifying the policy in:

A)
the prospectus.
B)
an annual letter to all fund shareholders.
C)
the annual report.


Adequate disclosure is typically accomplished by clearly stating the policy in the prospectus.






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