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Free CFA-Level-I Exam Braindumps (page: 100)

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PDF with 3963 Questions

Which of the following can be found in Standard IV?

  1. Members shall maintain knowledge of and comply with all applicable laws.
  2. Members shall make reasonable efforts to achieve public dissemination of material nonpublic information disclosed in breach of a duty.
  3. Members shall maintain appropriate records to support the reasonableness of recommendations.
  4. Members shall not undertake any independent practice in competition with employer without written consent.
  5. Members shall not participate in plagiarism.

Answer(s): C

Explanation:

Standard IV states: "Members shall maintain appropriate records to support the reasonableness of recommendations or actions."



Carve-outs may not be combined with ________ portfolios.

  1. new
  2. exchanged
  3. stand-alone
  4. composite
  5. benchmark

Answer(s): C

Explanation:

Stand-alone composites from subsectors or carve-outs of larger international portfolios can be created only if the subsectors are actually being managed as separate entities with their own cash allocations and currency management - for example, a series of currency funds.



Liliana works for Bear Funds, a brokerage firm. Bear has a policy of not allowing its employees to trade in securities in which it has large holdings. A list of such securities is circulated on a daily basis to the employees. Liliana knows of this restriction. However, a few days ago, she happened to purchase a few shares of a firm that are on Bear's restricted list. The total value of the purchase was less than $500. Liliana should

  1. none of these answers.
  2. report the transaction to the compliance department and see how best to unwind the transaction.
  3. inform her immediate supervisor about it and accept any sanctions.
  4. not do anything, because the activity is of negligible size.

Answer(s): B

Explanation:

Standard III (C) - Disclosure of Conflicts to Employer.



Which of the following can be found in Standard V?

  1. Members shall make reasonable and diligent efforts to avoid any material misrepresentation in any research report or investment recommendation.
  2. Members shall maintain knowledge of AIMR's Code of Ethics.
  3. If members receive material nonpublic information in confidence, they shall not breach that confidence by trading or causing others to trade in securities to which such information relates.
  4. Members must use the CFA designation in a dignified manner.
  5. Members shall comply with any prohibitions on activities imposed by their employer if a conflict of interest exists.

Answer(s): C

Explanation:

Standard V details: "Prohibition against use of material nonpublic information. If members receive material nonpublic information in confidence, they shall not breach that confidence by trading or causing others to trade in securities to which such information relates."






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