These questions are short, but tricky. Good luck!
If a CFA Institute member believes that the activity of his or her co-workers is unethical or in violation of the Code and Standards, the member should:
I. Confront the person engaging in the unethical conduct.
II. Attempt to stop the behavior by bringing it to the attention of their employer.
III. Dissociate from behavior by resigning, if necessary.
A. II only.
B. I, II and III.
C. I and II.
D. I only.
Which of the following is LEAST LIKELY to be an example of misrepresentation:
A. Plagiarizing the work of another analyst in writing a research report.
B. Claiming to have earned an academic degree or professional designation that has not yet been awarded.
C. Omitting relevant facts from a research report.
D. Guaranteeing a specific rate of return on the equity securities of a public company.
Which of the following statements regarding research reports is/are CORRECT according to the Standards of Practice Handbook?
I. Members should outline known limitations of their analysis.
II. Reports should be supported by background and supporting information, and this information should be available to interested parties.
III. Members must include all relevant factors in research reports.
A. I and II.
B. I, II, and III.
C. I and III.
D. II and III.
Gaines, a financial analyst for Skinner Investment Counseling, is told by the investor relations representative for Firebird Avionics, a major aircraft parts manufacturer, that the firm is in the final stages of building a new fuel efficient jet engine. This information is divulged by Firebird at the most recent quarterly conference call for analysts. Gaines uses this information along with other information he obtained from the company and distributed to the public in a research report that includes a “buy” recommendation for Firebird stock.
Which of the following statements is CORRECT:
A. Gaines violated the Code and Standards because he has a material misrepresentation in his report.
B. Gaines violated the Code and Standards because he used material nonpublic information.
C. Gaines’ actions did not violate the Code and Standards.
D. Gaines violated the Code and Standards because he failed to separate opinion from fact.
As part of his responsibilities as a research analyst, Gonzalez, along with several other analysts, takes a tour of the corporate headquarters and meets with management of a large electronics company in Asia. The company pays for the travel and accommodations of all the analysts participating in the 2-day tour and hosts a dinner, a golf tournament, and a sightseeing excursion for them as part of the trip. Under these circumstances, Gonzalez:
A. May attend the dinner and participate in the golf-tournament and sight-seeing excursion because Gonzalez considers these modest “perks” acceptable in the normal course of business.
B. May accept the reimbursement for the travel and accommodations because the firm paid for all the analysts and did not show favoritism to Gonzalez.
C. May attend the dinner and participate in the golf tournament and sight-seeing but not accept reimbursement for travel and accommodations.
D. Should not accept reimbursement for his travel and accommodation expenses and should not attend the dinner or participate in the golf tournament as doing so may impinge on Gonzalez’s independence and objectivity.
Which of the following is LEAST LIKELY to be considered a “material” piece of information regarding a company:
A. Changes in company management.
B. A government report of economic trends affecting a company.
C. Loss of a customer representing a significant portion of a company’s gross sales.
D. A former CFO of the company predicting long-term decline in the company’s stock.
Sheramy, a portfolio manager for Woodbridge Investment handles the account of Zamborino, a client of the firm. Zamborino offers to pay Sheramy a $100,000 bonus over and above her compensation from Woodbridge Investments if Sheramy achieves an 18 percent annual return for Zamborino’s account. Sheramy:
A. Can accept this offer as long as she discloses the arrangement to her employer.
B. Can accept this offer and disclose the bonus to her employer only if she actually achieves the performance target and receives the gift.
C. Cannot accept this offer because it is outside of her primary employment relationship with Woodbridge Investments.
D. Cannot accept this offer because it will interfere with her independence and ability to be objective regarding investment decisions and recommendations.作者: Chuckrox8 时间: 2013-3-30 20:45
No. 1– B. dissociate from behavior is necessary
No. 2 – A. Choice A is misconduct.
No. 3 – A
No. 4 – D. ?
No. 5 – D
No. 6 – A
How is the result??作者: joehogue 时间: 2013-3-30 20:45
Kosei: Sorry, don’t know the results. Got the questions from the free online ethics exam available on the CFA Institute website and they will not provide the answers. I got a 90% (44 out of 49), but I don’t know which questions I missed. Take the exam and let me know how you scored.作者: needhelp1700 时间: 2013-3-30 20:45
Q1; A
Q2: D
Q3: D
Q4: C
Q5: D
Q6: A作者: Howd 时间: 2013-3-30 20:45
1 - A
2 - A
3 - C
4 - C
5 - D
6 - B
7 - A作者: zbird2134 时间: 2013-3-30 20:45
I took the exam and since i got these questions right, I am posting confirmed correct answers.
soverby Wrote:
——————————————————-
> These questions are short, but tricky. Good
> luck!
>
>
> If a CFA Institute member believes that the
> activity of his or her co-workers is unethical or
> in violation of the Code and Standards, the member
> should:
>
> I. Confront the person engaging in the
> unethical conduct.
> II. Attempt to stop the behavior by bringing
> it to the attention of their employer.
> III. Dissociate from behavior by resigning,
> if necessary.
>
>
> A. II only.
>
> B. I, II and III.
>
> C. I and II.
>
> D. I only.
CORRECT ANSWER: B
> Which of the following is LEAST LIKELY to be an
> example of misrepresentation:
>
> A. Plagiarizing the work of another analyst in
> writing a research report.
>
> B. Claiming to have earned an academic degree or
> professional designation that has not yet been
> awarded.
>
> C. Omitting relevant facts from a research
> report.
>
> D. Guaranteeing a specific rate of return on the
> equity securities of a public company.
CORRECT ANSWER: C
> Which of the following statements regarding
> research reports is/are CORRECT according to the
> Standards of Practice Handbook?
>
> I. Members should outline known limitations
> of their analysis.
> II. Reports should be supported by background
> and supporting information, and this information
> should be available to interested parties.
> III. Members must include all relevant
> factors in research reports.
>
>
> A. I and II.
>
> B. I, II, and III.
>
> C. I and III.
>
> D. II and III.
CORRECT ANSWER: B
> Gaines, a financial analyst for Skinner Investment
> Counseling, is told by the investor relations
> representative for Firebird Avionics, a major
> aircraft parts manufacturer, that the firm is in
> the final stages of building a new fuel efficient
> jet engine. This information is divulged by
> Firebird at the most recent quarterly conference
> call for analysts. Gaines uses this information
> along with other information he obtained from the
> company and distributed to the public in a
> research report that includes a “buy”
> recommendation for Firebird stock.
>
> Which of the following statements is CORRECT:
>
> A. Gaines violated the Code and Standards because
> he has a material misrepresentation in his
> report.
>
> B. Gaines violated the Code and Standards because
> he used material nonpublic information.
>
> C. Gaines’ actions did not violate the Code and
> Standards.
>
> D. Gaines violated the Code and Standards because
> he failed to separate opinion from fact.
CORRECT ANSWER: C
> As part of his responsibilities as a research
> analyst, Gonzalez, along with several other
> analysts, takes a tour of the corporate
> headquarters and meets with management of a large
> electronics company in Asia. The company pays for
> the travel and accommodations of all the analysts
> participating in the 2-day tour and hosts a
> dinner, a golf tournament, and a sightseeing
> excursion for them as part of the trip. Under
> these circumstances, Gonzalez:
>
> A. May attend the dinner and participate in the
> golf-tournament and sight-seeing excursion because
> Gonzalez considers these modest “perks” acceptable
> in the normal course of business.
>
> B. May accept the reimbursement for the travel
> and accommodations because the firm paid for all
> the analysts and did not show favoritism to
> Gonzalez.
>
> C. May attend the dinner and participate in the
> golf tournament and sight-seeing but not accept
> reimbursement for travel and accommodations.
>
> D. Should not accept reimbursement for his travel
> and accommodation expenses and should not attend
> the dinner or participate in the golf tournament
> as doing so may impinge on Gonzalez’s independence
> and objectivity.
CORRECT ANSWER: D
>
> Which of the following is LEAST LIKELY to be
> considered a “material” piece of information
> regarding a company:
>
> A. Changes in company management.
>
> B. A government report of economic trends
> affecting a company.
>
> C. Loss of a customer representing a significant
> portion of a company’s gross sales.
>
> D. A former CFO of the company predicting
> long-term decline in the company’s stock.
CORRECT ANSWER: D
> Sheramy, a portfolio manager for Woodbridge
> Investment handles the account of Zamborino, a
> client of the firm. Zamborino offers to pay
> Sheramy a $100,000 bonus over and above her
> compensation from Woodbridge Investments if
> Sheramy achieves an 18 percent annual return for
> Zamborino’s account. Sheramy:
>
> A. Can accept this offer as long as she
> discloses the arrangement to her employer.
>
> B. Can accept this offer and disclose the bonus
> to her employer only if she actually achieves the
> performance target and receives the gift.
>
> C. Cannot accept this offer because it is
> outside of her primary employment relationship
> with Woodbridge Investments.
>
> D. Cannot accept this offer because it will
> interfere with her independence and ability to be
> objective regarding investment decisions and
> recommendations.
CORRECT ANSWER: A作者: KungFuPanda 时间: 2013-3-30 20:45
jrozario- I really thought the first question would be A which is to attempt to stop the behavior. I didn’t think you need to confront that person.作者: genuinecfa 时间: 2013-3-30 20:45
adee1031 Wrote:
——————————————————-
> jrozario- I really thought the first question
> would be A which is to attempt to stop the
> behavior. I didn’t think you need to confront
> that person.
Yes, I was kinda puzzled by this question also. I thought I would get it wrong but the answer really was I, II & III. I saved the exam with grading in a PDF format by printing the web page to PDF writer. The grading tells you if you get it wrong but does not tell what’s the correct answer.作者: IAmNeil 时间: 2013-3-30 20:45
Re #1. I personally thought resigning was going to be unnecessary; however, it is indeed B.
Page 18 of the Schweser Book 1:
Members should dissociate, or separate themselves, from any ongoing client or employee activity that is illegal or unethical, even if it involves leaving an employer (an extreme case). While a member may confront the involved individual first, he must approach his supervisor or compliance department. Inaction with continued association may be construed as knowing participation.作者: strikethree 时间: 2013-3-30 20:46
Why would CFAI not tell what is the correct answer???作者: wilslm 时间: 2013-3-30 20:46
According to jrozario’s answer, I think anwers for No. 2 and No. 3 conflict each other in some way. D of No. 2 said omitted some relavant factors in the report is not violate mispresentation while in No. 3 which is III. Members must include all relevant factors in research reports. Unless D of No. 2 is violation some other standard.
I think A of No. 2 should be the answer since it is violation of misconduct.作者: mar350 时间: 2013-3-30 20:46
I thought guaranteeing a specific return is a misconduct.作者: KungFuPanda 时间: 2013-3-30 20:46
The answers don’t make much sense:
1. > Gaines, a financial analyst for Skinner Investment
> Counseling, is told by the investor relations
> representative for Firebird Avionics, a major
> aircraft parts manufacturer, that the firm is in
> the final stages of building a new fuel efficient
> jet engine. This information is divulged by
> Firebird at the most recent quarterly conference
> call for analysts. Gaines uses this information
> along with other information he obtained from the
> company and distributed to the public in a
> research report that includes a “buy”
> recommendation for Firebird stock.
For this question, how is this not material nonpublic information? The new jet engine has only been divulged to a few analysts, not publically.
2. “Which of the following is LEAST LIKELY to be
> considered a “material” piece of information
> regarding a company:
>
> A. Changes in company management.
>
> B. A government report of economic trends
> affecting a company.
>
> C. Loss of a customer representing a significant
> portion of a company’s gross sales.
>
> D. A former CFO of the company predicting
> long-term decline in the company’s stock. ”
A material piece of information is one that will affect the stock price or outlook of a company. Are you telling me that the former CFO predicting a decline in the stock price will NOT affect the stock price of the company? All of these would affect the price, but I would imagine (B) affects it least.
3. “> Which of the following statements regarding
> research reports is/are CORRECT according to the
> Standards of Practice Handbook?
>
> I. Members should outline known limitations
> of their analysis.
> II. Reports should be supported by background
> and supporting information, and this information
> should be available to interested parties.
> III. Members must include all relevant
> factors in research reports.”
For this one, I remember reading somewhere that a member does not HAVE TO include all relevant details in research reports - as long as he outlines the known limitations of the analysis. So how is saying the SOPH *requires* ALL factors be included accurate?作者: ba736 时间: 2013-3-30 20:46
I must agree with you brafique much of those answers didn’t make sense to me either.作者: Unforseen 时间: 2013-3-30 20:46
^ Good to see I’m not alone! Does anyone else have any input on this?作者: OmarAdnan 时间: 2013-3-30 20:46
anyone ever get correct answers to these?
thanks, John作者: cityboy 时间: 2013-3-30 20:46
jrozario
Me thinks you’ve got ulterio motives!! Most of the answers you posted up there are not consistent withe Ethics readings. Case in point your answer for this: “Which of the following is LEAST LIKELY to be considered a “material” piece of information regarding a company”
As some have pointed out, the correct answer is B - as the gov is not an insider and hence least reliable.
Please stop the mischief!作者: king_kong 时间: 2013-3-30 20:46
Jrozario
How do you know you answered those questions correct? When I took the exam, I got 90% correct but it did not tell me which questions I missed. Unless you got 100% correct on the exam, I don’t see how you know that you did not miss one or more of those questions.作者: cfalevel2011 时间: 2013-3-30 20:46
The exam tells you which questions you missed it just doesn’t tell you the correct answer to the question. There should’ve been a “1 of 1” or “0 of 1” in red ink at the bottom of each question after submitting it for grading.作者: mp3bu 时间: 2013-3-30 20:46
The only questions I got wrong were 3 and 6, both of which have been discussed here. They are all from the online ethics test, which doesn’t give the correct answer if you get the question wrong. Good thread to examine those questions you did get wrong.
Question #1:
I. Members should outline known limitations of their analysis.
II. Reports should be supported by background and supporting information, and this information should be available to interested parties.
III. Members must include all relevant factors in research reports.
A. I and II.
B. I, II, and III.
C. I and III.
D. II and III.
I answered “A” based on the understanding that “all relevant factors” is such a subjective and broad reaching assumption. I don’t know how reasonable or even enforceable such a substandard would be, assuming that all obvious relevant factors have been included. I still think it is “A”.
Question 6:
Which of the following is LEAST LIKELY to be considered a “material” piece of information regarding a company:
A. Changes in company management.
B. A government report of economic trends affecting a company.
C. Loss of a customer representing a significant portion of a company’s gross sales.
D. A former CFO of the company predicting long-term decline in the company’s stock.
I am a little confused here. Personally I think government statistics is a relevant analytical tool, but is not really material to a specific company per se. Its hard to discount economic trends given there significance, but in this question, the other three options would no doubt provide a reasonable assumption of a change in the perception of the value of the companies stock.
————————————————————————————————————
I could be wrong on both of these. Thoughts???作者: dirk01 时间: 2013-3-30 20:46
cfacowtown:
the answer to question 1 should be A, i remember there was a post on this, one does not have to include all relevant factors.
and Question 2: D作者: jbaldyga 时间: 2013-3-30 20:46
cfacowtown, would you mind posting the letter answers (ie A, B, C, D) to questions 5,11,18,20,22, 33,36, & 37?? I think I know why I got them wrong but I’d love to have clarification. Thanks!作者: anish 时间: 2013-3-30 20:46
My apologies jgraham6, I didn’t save the entire test only those answers I got wrong….but I went back and redid the test with just those questions. Here are the answers. I think I found a problem though, the question numbers are not the same. Also they rearrange the questions (I double checked the wrong answers again the new quiz)…. for instance question 33 for me is:
Question 33 of 49
Which of the following is LEAST LIKELY to assist a Member in meeting their obligations with regard to presenting investment performance under the Code and Standards:
(a) Presenting the performance of a new investment strategy by applying the strategy to historical performance data.
(b) Presenting the performance of the weighted composite of similar portfolios.
(c) Complying with the Global Investment Performance Standards (GIPS).
(d) Making disclosures that explain the performance results being reported.
Anyways, for my test here was the answers, though I don’t think they will be much use to you.
05) B
11) A
18) A
20) A
22) D
33) A
36) B
37) B
So I don’t know if these are the right questions, might be better if you post the questions (if they don’t work….)作者: hw0799 时间: 2013-3-30 20:46
cfacowtown, thanks so much for your help! You are correct in that the questions and answers are rearranged for each test. I’ve copy and pasted the questions directly from the test. thanks a million!
******************************************
1)Waters is an investment analyst who has accumulated and analyzed several pieces of nonpublic information through her contacts with drug firms. Although none of the information is “material,” Waters correctly concludes that the earnings of one of the drug firms will be unexpectedly high in the coming year. Waters:
A: Should urge the drug firm to make public dissemination of the information immediately.
B: May use the information, but only after approval from a compliance officer or supervisory analyst.
C:Cannot legally invest or make investment recommendations based on this information.
D: Can use the information to make investment recommendations and decisions.
Question 7 of 49
Which of the following is LEAST LIKELY to be considered a “material” piece of information regarding a company:
A: Loss of a customer representing a significant portion of a company’s gross sales.
B: Changes in company management.
C: A former CFO of the company predicting long-term decline in the company’s stock.
D: A government report of economic trends affecting a company.
Question 44 of 49
Choi is a part of a research team that is collectively responsible for producing investment analysis for his firm’s portfolio managers. The research reports of the group contain all the names of the analysts on the research team. Generally, Choi agrees with the conclusions and recommendations contained in the reports published by the group, but occasionally he holds a minority view. In the report on a particular automotive company, Choi believes prospects for the company are dim while the remainder of the research group are optimistic about the company’s future. The final report recommends that investors buy stock in the company. Choi should:
A: Write his own report and publish it separately.
B: Inform his supervisors that, unless he dissociates from the report, he will be in violation of the Code and Standards.
C: Insist that his name be removed from the report.
D: Cooperate with publishing the report but document his difference of opinion with the research team.
Question 30 of 49
Gaines, a financial analyst for Skinner Investment Counseling, is told by the investor relations representative for Firebird Avionics, a major aircraft parts manufacturer, that the firm is in the final stages of building a new fuel efficient jet engine. This information is divulged by Firebird at the most recent quarterly conference call for analysts. Gaines uses this information along with other information he obtained from the company and distributed to the public in a research report that includes a “buy” recommendation for Firebird stock. Which of the following statements is CORRECT:
A: Gaines violated the Code and Standards because he used material nonpublic information.
B: Gaines violated the Code and Standards because he failed to separate opinion from fact.
C: Gaines violated the Code and Standards because he has a material misrepresentation in his report.
D: Gaines’ actions did not violate the Code and Standards.
Question 26 of 49
Chang is an investment advisor who operates as a sole proprietor and has five clients. If Chang obtains employment with a brokerage firm, he:
A: Does not have to advise his clients of his new employment with the brokerage firm or get consent from his new employer to keep his clients.
B: Must get consent from his new employer to keep his clients but does not have to advise his clients of his employment with the brokerage firm.
C: Must get written consent from his new employer to keep his clients and must advise his old clients in writing of his employment with the brokerage firm.
D: Must advise his clients of his employment with the brokerage firm but does not have to get consent from his new employer to keep his clients.
Question 5 of 49
Giannini is the head of the research department for an investment management firm. While Giannini is an accomplished analyst, in his current position, he does very little original research on his own. He reviews and revises the reports written by a very capable staff of junior analysts who produce original and insightful work. The firm has a policy that every report distributed to clients includes Giannini’s name and contact information as the head of the department. This policy:
A: Will mislead clients into thinking that Gianni did the research himself.
B: Misrepresents Giannini’s abilities as a research analyst and the extent of his expertise.
C: Complies with the Code and Standards so long as the report also identifies the analyst who actually did the research and wrote the report.
D: Violates the Code and Standards.
Question 2 of 49
Which of the following is LEAST LIKELY to be an example of misrepresentation:
A: Omitting relevant facts from a research report.
B: Plagiarizing the work of another analyst in writing a research report.
C: Guaranteeing a specific rate of return on the equity securities of a public company.
D: Claiming to have earned an academic degree or professional designation that has not yet been awarded.作者: infinitybenzo 时间: 2013-3-30 20:46
no worries jgraham6, here are the answers (I double checked, they are marked right):
01) D
07) C
44) D
30) D
26) C
05) C
02) A
Good luck.作者: LorrinCFA 时间: 2013-3-30 20:47
cfacowtown Wrote:
——————————————————-
> Question 6:
> Which of the following is LEAST LIKELY to be
> considered a “material” piece of information
> regarding a company:
>
> A. Changes in company management.
>
> B. A government report of economic trends
> affecting a company.
>
> C. Loss of a customer representing a significant
> portion of a company’s gross sales.
>
> D. A former CFO of the company predicting
> long-term decline in the company’s stock.
>
> I am a little confused here. Personally I think
> government statistics is a relevant analytical
> tool, but is not really material to a specific
> company per se. Its hard to discount economic
> trends given there significance, but in this
> question, the other three options would no doubt
> provide a reasonable assumption of a change in the
> perception of the value of the companies stock.
> I could be wrong on both of these. Thoughts???
I would think that the CFO prediction would have the least impact on the stock price and be immaterial. The gov’t report could be material if its related to the co’s business.
i would say D is immaterial.作者: troymo 时间: 2013-3-30 20:47
Originally I would agree with you, but I re-read it a couple times and now I think the answer is right. It is a former CFO, meaning fact separated from opinion is important here. Even though he may have insider knowledge that others don’t, there are to many what-ifs to justify that answer without more information. If the CFO was a current employee it would be a different story.
