1215

According to CFA Institute Standards of Professional Conduct, which of the following statements about the prohibition against plagiarism is most correct? The prohibition against plagiarism applies to written materials:

A) only.

B) and oral communications only.

C) oral communications, and telecommunications.

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The prohibition against plagiarism applies to all three areas.

1215

The following information involves two research analysts at a brokerage firm.

• Erik Bagenot, CFA, is preparing a research report on Global Enterprises, Inc. In preparing the report, he uses materials from many sources. For example, he uses factual information published by Standard & Poor's Corporation without acknowledging the source. He also uses excerpts from a research report prepared by another analyst. Bagenot makes only a slight change in wording for these excerpts, but acknowledges the source.
• Sally Wain, who is currently enrolled in the CFA program, is preparing a research report on Manson Telecommunications. She attends a conference in which several investment experts provide their views about the future prospects of this company. Wain cites several quotations from these investment experts in her report without specific reference.

According to CFA Institute Standards of Professional Conduct involving prohibition against plagiarism, which of the following statements is CORRECT?

A) Wain violated the Standards, but Bagenot did not.

B) Both Bagenot and Wain violated the Standards.

C) Bagenot violated the Standards, but Wain did not.

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Bagenot complied with Standard I(C), which permits publishing factual information from Standard & Poor's without acknowledgment and using excerpts with acknowledgment. Wain committed plagiarism because she failed to give specific references for the quotations that she used.

1215

Paul Thomas, CFA, is designing a new layout for research reports his firm writes and issues on individual stocks. In his design, Thomas includes a stock chart on the first page of each report. He does not reference that the charts are copied from an unrecognizable Finance web site. Thomas has:

A) violated CFA Institute Standards of Professional Conduct because he did not state the source of the charts.

B) not violated CFA Institute Standards of Professional Conduct because these charts are widely available over the Internet.

C) violated CFA Institute Standards of Professional Conduct because he did not make sure that the information in these charts is accurate.

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Standard I(C) Misrepresentation. Members should not copy or use material prepared by others without acknowledging and identifying the source of such material. Using charts and graphs without stating their source is a violation of the Standard.

1215

An analyst preparing a report does NOT need to cite the use of which of the following?

A) A recent quote from Alan Greenspan.

B) Estimates of betas provided by Standard & Poor's.

C) Charts developed by a colleague in the same firm.

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Statistics provided by a recognized agency, such as Standard and Poor’s, do not need to be cited. Charts, quotes, and algorithms developed by individuals must be cited when they are used.

1215

Which of the following is NOT considered plagiarism under CFA Institute Standards?

A) Using factual information from a recognized financial information agency without acknowledging the source of the information.

B) Improving an existing report and using it inside the company under a new title without acknowledging the source of the original report.

C) Adjusting an already published model and announcing it as a new model without acknowledging the source of the original model.

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Factual information that is already public and is obtained from a recognized information agency can be used without acknowledgment and is not considered plagiarism. All other options are considered plagiarism.

1215

Jamie Pyles, a portfolio management trainee for a money management firm, is trying to create a client base. He phones prospective clients, telling them that he is a portfolio manager. He informs prospective clients that based on the last five years of performance of his firm, he can guarantee the client at least a 75% return. He informs them that his firm can provide all of the services that they will ever need. What is the minimum number of misrepresentations Jamie has made to the prospective clients in violation of Standard I(C), Misrepresentation?

A) 3.

B) 5.

C) 2.

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There are at least three misrepresentations. First, that Jamie is a portfolio manager, when he's really a trainee. Second, that the firm can provide all of the services they will ever need. Third, that he can guarantee a 75% return.

1215

At the time of its initial public offering (IPO), a mutual fund is invested primarily in junk bonds. As part of its strategy, it is also invested in some zero-coupon U.S. Treasury bonds. The amount of the investment in the Treasury bonds is such that their maturity value equals 90% of the current value of the fund. Which of the following may a CFA Institute member say to her clients concerning the fund at issuance?

A) Since the fund is backed by the U.S. government, you know you will get your money back.

B) A CFA Institute member may not make either of these statements.

C) The fund is virtually default risk free.

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Standard I(C), Misrepresentation, prohibits making statements that mention a guarantee of returns or misrepresent the true nature of the investment.

1215

Which of the following is NOT expressly prohibited by Standard I(C), Misrepresentation?

A) providing information on guaranteed investment products.

B) misrepresenting the services a member is capable of performing.

C) misrepresenting a member’s academic or professional credentials.

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Misrepresentation of qualifications, academic and professional credentials and services that can be performed by the firm are all expressly prohibited by Standard I(C).

1215

Which of the following is most likely permitted under Standard I(C), Misrepresentation?

A) Including an exhibit of the current yield curve in a report to a client without stating its source.

B) Using excerpts from reports prepared by others without acknowledgement.

C) Citing quotes attributed to "investment experts" without specific reference.

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The current yield curve is factual information that is available from many recognized financial or statistical reporting services.

1215

A money manager works for a full-service brokerage firm. After meeting with a new client and gathering all relevant information, the money manager says that she thinks her firm can perform all the financial services the new client needs. With respect to Standard I(C), Misrepresentation, this:

A) may not be a violation if the representation was made orally.

B) may not be a violation if the manager's opinion is based upon the factual information gathered.

C) is a violation because she cannot make statements like this under any circumstances.

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There is no violation if the opinion is based upon the factual information gathered and the firm’s actual capabilities. This is true whether or not the representation was written, oral, or electronic. None of the other choices are correct.