Session 1: Ethical and Professional Standards
Reading 2-II: Standards of Professional Conduct & Guidance: Integrity of Capital Markets
LOS B.: Market Manipulation.
Steve Waters, a CFA Level I candidate, has decided to enter into a long position of Farmco stock. Since Farmco is thinly traded, Waters is concerned the order will overwhelm the liquidity of Farmco and the price will surge. Waters engages in a series of block trades in order to accomplish the purchase. According to Standard II(B), Market Manipulation, Waters has engaged in:
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A) |
neither transaction-based manipulation nor information-based manipulation. | |
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B) |
transaction-based manipulation, but not information-based manipulation. | |
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C) |
both transaction-based manipulation and information-based manipulation. | |
Waters is not in violation of Standard II(B), Market Manipulation. Transaction-based manipulation includes, but is not limited to, transactions that artificially distort prices or volume. Information-based manipulation includes, but is not limited to, spreading false rumors about a firm in order to induce others to trade. | 
发表于 2011-2-24 14:16
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