51、Lon Smith is an analyst in the Research Department of Lincoln & Co., a large investment firm. He has just completed a temporary assignment in Lincoln's Corporate Finance Department related to FinSoft, a computer software company whose recent operating record has reflected lagging sales volume and heavy product development expenses. Smith has marked his FinSoft notes and work sheets "CONFIDENTIAL / CORPORATE FINANCE DEPARTMENT" and sent them to the company file in the Research Department. This material reveals that FinSoft is about to receive a major contract for an innovative software program that will have a very significant positive impact on earnings as well as on the company's visibility and stature in the industry. Jay Jones, a CFA candidate and a portfolio manager for Lincoln, has come upon these notes and work sheets while reviewing the FinSoft research file. Jones had been considering sale of the stock from the accounts under his management, but realizes after reading the file material that the recent weakness in operating results is about to be reversed and that the company's prospects are actually quite favorable. Perhaps, he thinks, he should add to his clients' FinSoft positions instead of considering their sale. Jones briefly reflects on the matter of "inside information" in relation to perhaps buying more of the stock instead of selling it, but his recollection is hazy and Lincoln has no formal guidelines on the subject to which he can refer. Based on the circumstances, Jones believes he is free to use this new knowledge for the benefit of Lincoln's clients. Based on CFA Institute Standards of Professional Conduct, which of the following is NOT correct? A) There is no breach of duty if traded on because Jones did not conduct the research that produced the information. B) The information is material because the new software is likely to significantly increase FinSoft's future earnings. C) The information is nonpublic because there is no indication it has been disclosed in the marketplace. D) There is misappropriation of information by Jones because the file is marked "Confidential / Corporate Finance Department." The correct answer was A) Jones has a derivative duty not to trade or cause others to trade on material nonpublic information. It does not matter that he did not conduct the research. 52、Based on the information presented in this situation, Jones has an obligation to do all of the following EXCEPT:
A) encourage public dissemination of the information. B) wait to trade on the information until after a reasonable period has passed. C) report the situation to his supervisor or the firm's compliance officer. D) encourage his employer to review the compliance procedures as they relate to material nonpublic information issues. The correct answer was B) Jones has an obligation to not trade on the information until after he is sure the information has been made public. 53、Based on the information presented, Lincoln should adopt a set of guidelines on inside information that include each of the following EXCEPT:
A) have in place a supervisor or compliance officer who has the authority and responsibility to decide whether information is material and nonpublic. B) develop criteria for identifying inside information. C) prohibit exchange of personnel, even temporary, between investment banking and institutional money management departments. D) establish an information barrier between personnel who invest client funds and personnel who work in corporate finance. The correct answer was C) There is no need to avoid transfer of personnel as long as proper safeguards and procedures are observed. 54、June Bird is a pension consultant asked to advise on the Backwater County Pension Plan. Bird notices that 20 percent of the plan's assets are invested in privately held local businesses. Bird is concerned about the lack of liquidity and diversification caused by such an investment. She learns that state law allows investing in local businesses and county law requires at least one-fifth of the plan's assets to be dedicated to investing in local businesses. Bird: A) should file a written complaint to the Department of Labor pointing out that the law is in conflict with the Employee Retirement Income Security Act (ERISA). B) must immediately resign as a consultant to the plan or risk forfeiting her CFA Charter. C) can continue to advise the pension plan as best she can with the restrictions. D) should recommend that the trustees resign or risk being sued for violating the Prudent Expert Rule. The correct answer was C) According to Standard III(A), Loyalty, Prudence, and Care, Bird can continue to serve as a consultant to the plan, but must follow the applicable law. 55、Patricia Cuff is the chief financial officer and compliance officer at Super Selection Investment Advisors that has incorporated the CFA Institute Code of Standards into the firm's compliance manual. Karen Trader is a portfolio manager for Super Selection. Trader is friendly with Josey James, president of AMD, a rapidly growing biotech company. Trader has served on AMD's board of directors for the last three years. James has asked Trader to commit to a large purchase of AMD stock for her portfolios. Trader had previously determined that AMD was a questionable investment but agreed to reconsider. Her reevaluation deemed the stock to be overpriced, but she nevertheless decides to purchase for her portfolios. Which standard was NOT broken? A) IV(C)--Responsibilities of Supervisors. B) VI(A)--Disclose of Conflicts. C) I(C)--Misrepresentation. D) IV(A)--Loyalty. The correct answer was D) IV(A) Loyalty was not broken because this standard involves going into a business that competes with your employer. IV(C) Responsibilities of Supervisors was breached because Trader broke several CFA Institute Standards which Cuff should have enforced. VI(A) Disclose of Conflicts was breached because Trader did not disclose that she was on AMD's board. I(C) Misrepresentation was broken because Trader purchased stock for her clients even though she thought AMD was a questionable investment. | 
发表于 2008-4-8 11:25
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