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Free CFA-Level-I Exam Braindumps (page: 114)

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The AIMR Performance Presentation Standards are

  1. voluntary standards for the industry.
  2. mandatory for CFA Charterholders and Candidates.
  3. voluntary standards for the industry, but mandatory standards for AIMR members.
  4. mandatory standards for the industry.

Answer(s): A

Explanation:

The AIMR-PPS are voluntary standards for the industry. Firms are not required to comply with the Standards when presenting performance, but the Standards are widely recognized as the most effective guidelines for fair and accurate reporting of investment performance.



The mosaic theory holds that an analyst:

  1. Can use material public information or nonmaterial nonpublic information in the analyst's analysis.
  2. Should distinguish between facts and opinions in research reports.
  3. Should use all available and relevant information in support of an investment recommendation.
  4. Violates the Code and Standards if the analyst fails to notify her or his employer of the Code and Standards fails to have knowledge of and comply with applicable laws.

Answer(s): A

Explanation:

This question pertains to Standard V (A), Prohibition against Use of Material Nonpublic Information. The mosaic theory states that an analyst may use material public information or nonmaterial nonpublic information in creating a larger picture than shown by any individual piece of information and the conclusions drawn become material only after the pieces are assembled. All the other answers describe violations of the Code and Standards, but are not the mosaic theory.



Portfolios that include more than one asset class are called ________ portfolios.

  1. quasi-asset
  2. multivariate
  3. multiple leverage
  4. univariate-asset
  5. multiple-asset

Answer(s): E

Explanation:

If the firm does not have discretion over the asset mix, the segments of the various asset classes, with their respective cash positions, must be included in composites composed of like assets.



The Standards state that when presenting material to others, members shall not "copy or use, in substantially the same form as the original, material prepared by another without acknowledging and identifying the name of the author, publisher, or source of such material." The analyst may use information from other sources without acknowledgment, however, if the information:

  1. is factual information published in recognized financial and statistical reporting services.
  2. does not include a buy or sell recommendation.
  3. was originally communicated verbally.
  4. is being reported only to the member's employer or associates.

Answer(s): A

Explanation:

This question relates to Standard II (C), Prohibition against Plagiarism, which states that members may use factual information published in recognized financial and statistical reporting services without attribution. Even if the information is communicated verbally, members must use proper attribution of the material. Whether or not the plagiarized material is combined with a buy/sell recommendation or reported only to the member's employer or associates does not change the fact that the member is copying material without acknowledgment.






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