Question 11

Dan Lee, CFA, is a portfolio manager with Jewel Investment Advisors. Doris Black, one of Lee's long-time clients, tells Lee that he can use her vacation home in Aspen, Colorado, for a week during skiing season if the return on her portfolio exceeds its benchmark by two percentage points during the next year. Black also offers to reimburse Lee and his wife for their transportation expenses to Aspen. Lee accepts this arrangement. According to CFA Institute Standards of Professional Conduct, what is Lee's obligation, if any, to disclose this arrangement to Jewel? Lee:

A)    need not disclose either the arrangement to use Black's vacation home or the reimbursement of expenses.

B)   must disclose both the arrangement to use Black's vacation home and the reimbursement of expenses.

C)   must disclose in writing the arrangement to use Black's vacation home but not the reimbursement of expenses.

D)   must disclose the reimbursement of expenses but not the arrangement to use Black's vacation home.

Question 12

Bertrand Greene, CFA, is preparing a report on Blanding, Inc. Blanding's earnings have increased in each of the last six years by an average of 11.8%. based on his analysis, Greene projects that Blanding's earnings will increase by 12.5% in each of the next two years. Which of the following statements included in Greene’s report violates the Code and Standards?

A)    "Blanding's earnings will grow at 12.5% annually in each of the next two years."

B)   "Blanding's earnings have been compounding at approximately 11.8% annually."

C)   "Blanding's earnings growth is expected to exceed 12.5% annually in future years."

D)   "Blanding's earnings growth continues to be impressive."

Question 13

Mary Fellows, CFA, is explaining the construction of composites for performance reporting according to Global Investment Performance Standards (GIPS). Fellows states, “A composite must include all fee-paying, discretionary and non-discretionary portfolios that have the same strategy or investment objective. The composite in which a portfolio will be included should be determined no later than one year from the portfolio’s inception.” Fellows is:

A)    correct.

B)   incorrect, because the composite that will include a portfolio should be determined prior to the performance period.

C)   incorrect, because a composite is not required to include non-discretionary portfolios.

D)   incorrect, because a composite is not required to include non-discretionary portfolios, and because the composite that will include a portfolio should be determined prior to the performance period.

Question 14

According to Standard III(A) Loyalty, Prudence and Care, brokerage is an asset of the:

A)    managing firm.

B)   manager within the managing firm.

C)   brokerage firm conducting the trades.

D)   client.

Question 15

Which of the following statements regarding Standard V(C) – Record Retention is least accurate?

A)    When no other regulatory guidance applies, the Standard recommends retaining records for at least seven years.

B)   When members change employers, transferring the records supporting their investment recommendations to the new employer is the member’s responsibility.

C)   While members are responsible for retaining research notes and other supporting documents, record retention is generally the responsibility of the firm.

D)   Firms can comply with the Standard by retaining documents in electronic form.

[此贴子已经被作者于2008-11-8 18:04:52编辑过]

Question 11

Dan Lee, CFA, is a portfolio manager with Jewel Investment Advisors. Doris Black, one of Lee's long-time clients, tells Lee that he can use her vacation home in Aspen, Colorado, for a week during skiing season if the return on her portfolio exceeds its benchmark by two percentage points during the next year. Black also offers to reimburse Lee and his wife for their transportation expenses to Aspen. Lee accepts this arrangement. According to CFA Institute Standards of Professional Conduct, what is Lee's obligation, if any, to disclose this arrangement to Jewel? Lee:

A)    need not disclose either the arrangement to use Black's vacation home or the reimbursement of expenses.

B)   must disclose both the arrangement to use Black's vacation home and the reimbursement of expenses.

C)   must disclose in writing the arrangement to use Black's vacation home but not the reimbursement of expenses.

D)   must disclose the reimbursement of expenses but not the arrangement to use Black's vacation home.

The correct answer was B)

Standard IV(B) Additional Compensation Arrangements requires that Lee disclose to Jewel in writing any extra monetary compensation or other benefits that he receives from outside the firm for his services.

This question tested from Session 1, Reading 2-IV, LOS B.

Question 12

Bertrand Greene, CFA, is preparing a report on Blanding, Inc. Blanding's earnings have increased in each of the last six years by an average of 11.8%. based on his analysis, Greene projects that Blanding's earnings will increase by 12.5% in each of the next two years. Which of the following statements included in Greene’s report violates the Code and Standards?

A)    "Blanding's earnings will grow at 12.5% annually in each of the next two years."

B)   "Blanding's earnings have been compounding at approximately 11.8% annually."

C)   "Blanding's earnings growth is expected to exceed 12.5% annually in future years."

D)   "Blanding's earnings growth continues to be impressive."

The correct answer was A) "Blanding's earnings will grow at 12.5% annually in each of the next two years."

Blanding’s future earnings growth rate is stated as a fact. Standard V(B), Communication with Clients and Prospective Clients, requires members to distinguish between fact and opinion in research reports.

This question tested from Session 1, Reading 2-V, LOS B.

Question 13

Mary Fellows, CFA, is explaining the construction of composites for performance reporting according to Global Investment Performance Standards (GIPS). Fellows states, “A composite must include all fee-paying, discretionary and non-discretionary portfolios that have the same strategy or investment objective. The composite in which a portfolio will be included should be determined no later than one year from the portfolio’s inception.” Fellows is:

A)    correct.

B)   incorrect, because the composite that will include a portfolio should be determined prior to the performance period.

C)   incorrect, because a composite is not required to include non-discretionary portfolios.

D)   incorrect, because a composite is not required to include non-discretionary portfolios, and because the composite that will include a portfolio should be determined prior to the performance period.

The correct answer was D) incorrect, because a composite is not required to include non-discretionary portfolios, and because the composite that will include a portfolio should be determined prior to the performance period.

A composite includes all discretionary, fee-paying portfolios that are managed according to the same strategy or objective. Non-discretionary portfolios are not included. The firm should choose the composite in which each portfolio will be included on an ex-ante basis according to predetermined criteria, so that the firm cannot selectively include only the best-performing portfolios in a composite.

This question tested from Session 1, Reading 3, LOS b

Question 14

According to Standard III(A) Loyalty, Prudence and Care, brokerage is an asset of the:

A)    managing firm.

B)   manager within the managing firm.

C)   brokerage firm conducting the trades.

D)   client.

The correct answer was D) client.

Brokerage is an asset of the client.

This question tested from Session 1, Reading 2, LOS a, b, c

Question 15

Which of the following statements regarding Standard V(C) – Record Retention is least accurate?

A)    When no other regulatory guidance applies, the Standard recommends retaining records for at least seven years.

B)   When members change employers, transferring the records supporting their investment recommendations to the new employer is the member’s responsibility.

C)   While members are responsible for retaining research notes and other supporting documents, record retention is generally the responsibility of the firm.

D)   Firms can comply with the Standard by retaining documents in electronic form.

The correct answer was B) When members change employers, transferring the records supporting their investment recommendations to the new employer is the member’s responsibility.

Records supporting investment actions and recommendations are the property of the firm. A member cannot take these records or copies of them to a new employer without permission from the original employer. The other statements are accurate.

This question tested from Session 1, Reading 2-V, LOS C.

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