Reading 2-VI: Standards of Professional Conduct & Guid behalf, black, white, applies

mayanfang1

Q1. Standard VI(B), Priority of Transactions, applies to transactions an analyst takes on behalf of:

A)   his clients.

B)   his employer.

C)   both of these.

Q2. An analyst, who is a CFA Institute member, manages a high-grade bond mutual fund. This is his only professional responsibility. When the analyst comes across a speculative stock investment that he feels is a good investment for his personal portfolio, the analyst:

A)   may invest in the stock because the analyst would not purchase the stock for the bond portfolio he manages.

B)   is in violation of Standard IV(A), Loyalty to Employer, by spending time analyzing stocks when he should only analyze bonds.

C)   must notify his supervisor about the stock according to Standard VI(B), Priority of Transactions, to see if it is appropriate for the portfolio that he manages.

Q3. An analyst has a large personal holding of a security, and he has just determined that market conditions warrant selling this security. The analyst contacts clients who have a position in the security and advises them to sell some or all of the security. After waiting 24 hours, he sells the security from his personal accounts. This is:

A)   congruent with Standard VI(B), Priority of Transactions.

B)   a violation of Standard VI(B), Priority of Transactions.

C)   a violation of Standard III(B), Fair Dealing.

mayanfang1

答案和详解如下：

Q1. Standard VI(B), Priority of Transactions, applies to transactions an analyst takes on behalf of:

A)   his clients.

B)   his employer.

C)   both of these.

Correct answer is C)         

Standard VI(B) addresses the treatment of both these accounts. The accounts of clients and employers have priority over personal accounts.

Q2. An analyst, who is a CFA Institute member, manages a high-grade bond mutual fund. This is his only professional responsibility. When the analyst comes across a speculative stock investment that he feels is a good investment for his personal portfolio, the analyst:

A)   may invest in the stock because the analyst would not purchase the stock for the bond portfolio he manages.

B)   is in violation of Standard IV(A), Loyalty to Employer, by spending time analyzing stocks when he should only analyze bonds.

C)   must notify his supervisor about the stock according to Standard VI(B), Priority of Transactions, to see if it is appropriate for the portfolio that he manages.

Correct answer is A)

The problem says the analyst “came across” the speculative stock investment. We do not know if the analyst neglected his duties. Since such an investment is clearly not appropriate for a high-grade bond fund, the analyst may invest in the stock without any restrictions relating to the fund.

Q3. An analyst has a large personal holding of a security, and he has just determined that market conditions warrant selling this security. The analyst contacts clients who have a position in the security and advises them to sell some or all of the security. After waiting 24 hours, he sells the security from his personal accounts. This is:

A)   congruent with Standard VI(B), Priority of Transactions.

B)   a violation of Standard VI(B), Priority of Transactions.

C)   a violation of Standard III(B), Fair Dealing.

Correct answer is A)

According to Standard VI(B), an analyst must give clients the first opportunity to buy or sell a security before the analyst acts on his own behalf. A 24-hour waiting period seems reasonable under the circumstances presented. The analyst seems to have a reasonable basis, and there is no reason to believe that he is violating Standard III(B) since he contacted all of the clients who have a position in the security.

pundit

a

pundit

a

ibmtracy

dd

zhouyp1982

 r

erin_huangcn

1

sszzyyll

 d

malesword

hj

ohwow_my

  thanks