QUESTION: 277

Grazelle Garbo has decided to change the recommendation on one of the firms she is following from hold to buy. She has communicated her research report to her senior manager, who is reviewing it. If the recommendation passes muster, it will be released three days from now. In the meanwhile, Grazelle has decided to follow her research and purchase the stock for several of her clients' accounts for which the stock is an appropriate investment and for which she has discretionary investment powers. In the course of the luncheon meeting that same day, she mentioned that she had bought the stocks for some client accounts to one of her prospective clients and described her research which caused her to change her recommendation.
Grazelle has

violated Standard IV (B.3) - Fair Dealing - by revealing the change in recommendation.
II. violated Standard IV (B.5) - Preservation of Confidentiality - by revealing the information about stock purchase.
III. did not violate the Ethics code.
I and II only
II only
III only
I only

Answer(s): D

Explanation:

Since Grazelle has not revealed any information about the specific client accounts or any confidential information, she is not in violation of Standard IV (B.5) - Preservation of Confidentiality. However, by revealing the information on the change in recommendation prematurely to one of her prospective clients, she has violated Standard IV (B.3) - Fair Dealing. The information is potentially quite valuable and giving to one client before another in a partisan fashion is a violation of the AIMR code of Ethics.

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QUESTION: 278

Which of the following AIMR Standards pertains to the use of professional designation?

II (A)
I
III (A)
III (B)

Answer(s): A

Explanation:

Standard II (A) - Use of Professional Designation - states the responsibility of AIMR members, CFA charterholders and candidates for the CFA designation to use their professional designations, or their candidacies for the designation, properly and in a manner that does not mislead the investing public or others.

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QUESTION: 279

In reference to AIMR-PPS, which of the following is/are true?

The PPS are explicitly incorporated in the AIMR Code of Ethics and Standards of Professional Conduct.
II. In case of system incompatibilities, the firm can claim compliance for only those assets that are measured and monitored on compatible systems.
III. Plan sponsors, consultants and software vendors cannot claim compliance with the PPS; they can only endorse or require their clients to be in compliance.
I, II and III
III only
II and III only
I only

Answer(s): B

Explanation:

The PPS are an adjunct to the AIMR Code of Ethics and Standards of Professional Conduct and not explicitly incorporated in that framework. Compliance with PPS is voluntary, not required.

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QUESTION: 280

Standard IV (B.2) deals with ________.

compensation
fair dealing
soft dollars
competition
none of these answers
suitability
proxy voting
disclosure of conflicts

Answer(s): F

Explanation:

Standard IV (B.2) deals with the appropriateness and suitability of investment recommendations for each portfolio or client.

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Free CFA-Level-I Exam Braindumps (page: 70)

QUESTION: 277

Explanation:

QUESTION: 278

Explanation:

QUESTION: 279

Explanation:

QUESTION: 280

Explanation: