Q1. Sharon Fischer manages an equity mutual fund, and she uses soft dollars generated on this account to obtain municipal bond research for an associate whose fund is small and does not generate a sufficient level of soft dollars for his municipal bond research needs. With regard to this action, which of the following statements is TRUE? This action is:

A)    not permissible; Fischer is not in violation of her fiduciary duties.

B)    not permissible; Fischer is in violation of her fiduciary duties.

C)    permissible; Fischer is not in violation of her fiduciary duties.

Q2. Waldmann Brothers & Company offers Pyramid Investment Advisors the use of its proprietary investment allocation software. This package is purported to improve the risk-return trade-off for assets under management, and is also useful for the generation of various diagnostic reports that will benefit Pyramid. Goldman, Pyramid’s CEO estimates that about 70 percent of the value of the package is the improvement of the risk-return trade-off, and that this will be valuable to the holders of Pyramid’s Growth Fund. The remaining value of the package accrues to Pyramid in the form of increased management efficiency. If the value of the package is $50,000 per year, how much of this must be paid by Pyramid?

A)    $35,000.

B)    $15,000.

C)    $50,000.

Q3. Marc Schultz manages an equity mutual fund, and he uses soft dollars generated on this account to obtain equity research to assist him in managing the portfolio. With regard to this action, which of the following statements is TRUE? This action is:

A)    not permissible; Schultz is in violation of his fiduciary duties.

B)    permissible; Schultz is not in violation of his fiduciary duties.

C)    not permissible; Schultz is not in violation of his fiduciary duties.

Q4. Springfield Investment Advisors uses soft dollars generated with mutual fund transactions to get software that is used 50 percent of the time to assist in the management of client assets. Which of the following statements is TRUE? This action is:

A)    not permissible since items purchased must provide 100% of their benefits to clients.

B)    permissible only if the firm pays for 50% of the software cost with its own resources.

C)    permissible since items purchased with soft dollars must be tangible, and software is intangible.

答案和详解如下：

A)    not permissible; Fischer is not in violation of her fiduciary duties.

B)    not permissible; Fischer is in violation of her fiduciary duties.

C)    permissible; Fischer is not in violation of her fiduciary duties.

Correct answer is B)         

Since the research purchased is not relevant to the client assets generating the soft dollars, the action is not permissible. By this action, she is effectively transferring assets belonging to the equity clients to the clients of the municipal fund. This is in violation of the Code and Standards.

Q2. Waldmann Brothers & Company offers Pyramid Investment Advisors the use of its proprietary investment allocation software. This package is purported to improve the risk-return trade-off for assets under management, and is also useful for the generation of various diagnostic reports that will benefit Pyramid. Goldman, Pyramid’s CEO estimates that about 70 percent of the value of the package is the improvement of the risk-return trade-off, and that this will be valuable to the holders of Pyramid’s Growth Fund. The remaining value of the package accrues to Pyramid in the form of increased management efficiency. If the value of the package is $50,000 per year, how much of this must be paid by Pyramid?

A)    $35,000.

B)    $15,000.

C)    $50,000.

Correct answer is B)         

Since approximately 30 percent of the value of the asset accrues to the management of the investment firm, 0.30 * 50,000 = $15,000 should be paid by Pyramid. The remainder can be funded with soft dollars, since the balance of the value will accrue to the clients who will directly benefit from the acquisition of the asset.

Q3. Marc Schultz manages an equity mutual fund, and he uses soft dollars generated on this account to obtain equity research to assist him in managing the portfolio. With regard to this action, which of the following statements is TRUE? This action is:

A)    not permissible; Schultz is in violation of his fiduciary duties.

B)    permissible; Schultz is not in violation of his fiduciary duties.

C)    not permissible; Schultz is not in violation of his fiduciary duties.

Correct answer is B)         

Since the research is relevant to the client assets and is used for the benefit of the client, the action is permissible, and there is no violation.

Q4. Springfield Investment Advisors uses soft dollars generated with mutual fund transactions to get software that is used 50 percent of the time to assist in the management of client assets. Which of the following statements is TRUE? This action is:

A)    not permissible since items purchased must provide 100% of their benefits to clients.

B)    permissible only if the firm pays for 50% of the software cost with its own resources.

C)    permissible since items purchased with soft dollars must be tangible, and software is intangible.

Correct answer is B)         

As long as the software is used for the benefit of clients 50% of the time it is permissible to pay for 50% of the software with soft dollars. The remainder must be paid for by the firm with its own resources.

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