Reading 2-I: Standards of Professional Conduct & Guidan states, center, potential, investment, 2010

bmaggie

Session 1: Ethical and Professional Standards
Reading 2-I: Standards of Professional Conduct & Guidance: Professionalism

LOS C.: Misrepresentation.

 

 

 

 

Marc Randall, CFA, is an investment analyst. During a meeting with a potential client, Randall's boss states that, "You can be sure our investments will always outperform Treasury Bonds because of our fine research staff members, like Marc." Randall knows that this statement is:

A) a violation of fiduciary duties owed to clients under the Standards.

B) not in violation of the Code and Standards.

C) a violation of the Standard concerning prohibition against misrepresentation.

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Under Standard I(C), members are forbidden from guaranteeing a specific rate of return on volatile investments. Therefore, the statement is in violation of the Standard.

[此贴子已经被作者于2010-3-31 11:26:12编辑过]

zaestau

 c

bmaggie

Which of the following is NOT a form of plagiarism?

A) Presenting statistical forecasts by others with the sources identified but without the qualifying statements that may have been used by the originator.

B) Using factual information published by a recognized financial statistics reporting service without acknowledgment.

C) Citing quotations said to be attributable to "leading analysts" or "investment experts" without specific reference.

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Members may not generally use material without acknowledging the original source, but an exception is made for factual information published by recognized financial and statistical reporting services.

bmaggie

 

Wes Smith, CFA, has been working toward the completion of a Master of Science in Finance. He has passed all the necessary courses and written the necessary thesis. He still must defend the thesis in one month. Smith’s thesis advisor assures him that he will pass the thesis defense. Smith has new business cards printed with “M.S. in Finance” after his name. This is a violation of:

A) Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program.

B) none of the Standards if Smith does not make the cards public until after he defends his thesis and receives his degree.

C) Standard I(C), Misrepresentation.

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If the cards were distributed today he would be in violation of Standard I(C), Misrepresentation. However, if Smith does not make the cards public until after he receives the degree, there is no violation.

bmaggie

All of the following violate Standard I(C), Misrepresentation, EXCEPT:

A) copying a proprietary computerized spreadsheet without seeking authorization from the creators.

B) citing quotes attributable to "investment experts" without specific references.

C) presenting factual information published by recognized statistical reporting services without acknowledgment.

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Standard I(C), Misrepresentation, permits using recognized sources of factual information such as Standard & Poor’s Corporation and Moody’s Investors Service without acknowledgment.

bmaggie

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.

bmaggie

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 TRUE?

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.

bmaggie

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

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

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.

bmaggie

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) Charts developed by a colleague in the same firm.

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

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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.

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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.