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Free CFA-Level-I Exam Braindumps (page: 53)

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Julius Christus is an AIMR member and a vice president in the Risk Control department of a major commercial bank. Julius recently discovered that Jill Chapman had been grossly negligent in her duties involving monitoring of trading limits and violations by the trading desk. This is the first time Jill has been found to be remiss in her duties. Which of the following actions is the minimum necessary for Julius to be in compliance with Standard III (E) - Responsibilities of Supervisors?

  1. Initiate an inquiry and take steps, such as placing limits on Jill's activities and increasing the monitoring of her activities to ensure that future violations do not occur.
  2. Determine the extent of the violations and warn Jill in no uncertain terms that a repeat incidence would lead to her losing the job.
  3. Terminate Jill's employment.
  4. Report the misconduct to his superiors and warn Jill in writing that future misconduct would lead to immediate termination of employment.

Answer(s): A

Explanation:

"Procedures for Compliance," Standard III (E).



Which of the following can be found in Standard II?

  1. Members shall not knowingly participate or assist in any violation of laws, rules, or regulations.
  2. Members shall not participate in any professional conduct involving dishonesty, fraud, deceit, etc.
  3. Members shall deliver a copy of the Code to their employer.
  4. Members shall not misrepresent investment performance.
  5. Members shall exercise diligence and thoroughness in making investment recommendations or in taking investment actions.

Answer(s): B

Explanation:

Standard II states that members shall: "Not participate in any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects adversely on their honesty, trustworthiness or professional competence."



To fulfill the basic provisions of Standard IV (B.2), a member should ________.

  1. stay free of all conflicts of interest
  2. develop an investment policy statement for each client
  3. discuss the proxy voting policy with management
  4. disclose to clients, all additional compensation agreements
  5. disclose all soft dollar arrangements

Answer(s): B

Explanation:

In formulating an investment policy for the client, the member should take into consideration client identification, investor objectives, and investor constraints.



Each of the following is true regarding Standard II (A), except:

  1. You may not state that you have completed Level I, II, or III until you have received the CFA designation.
  2. This standard relates to oral statements.
  3. All of these answers.
  4. This standard relates to business cards and letterheads.
  5. You must be registered for the next CFA exam in order to call yourself a candidate.
  6. There is no designation for someone who has passed Level I, II, or III.

Answer(s): A

Explanation:

Standard II (A) relates to the responsibility of AIMR members and candidates to use their professional designation properly and in a non-misleading manner. A person must be registered to take the next scheduled CFA exam to be a "candidate" in the CFA program. There is no designation for someone who has passed Level I, II, or III of the CFA exam. Candidates may state, however, that they have completed Level I, II, or III.
The standard applies to all related explanations or descriptions of the CFA designation, including letterheads and business cards, resumes, directory listings, printed advertising, brochures and oral statements to clients and prospects.






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