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Free CFA-Level-I Exam Braindumps (page: 75)

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Standard IV (B.1) clearly states that ________ owe undivided loyalty to their clients and must place client interests before their own.

  1. AIMR members
  2. supervisors
  3. none of these answers
  4. fiduciaries
  5. analysts

Answer(s): D

Explanation:

Standard IV (B.1) - Fiduciary Duties states that "In relationships with clients, members shall use particular care in determining fiduciary duty and must act for the benefit of their clients and place their clients' interests before their own." "Fiduciaries" is the best answer.



The primary beneficiaries of the AIMR-PPS are:

  1. current & prospective clients.
  2. AIMR members.
  3. all investment professionals.
  4. investment firms who adopt the standards.

Answer(s): A

Explanation:

Since the PPS strive to achieve greater uniformity and compatibility amongst the various performance presentations, clients who wish to compare investment results across various firms benefit the most. Note, however, the mere compliance of a firm with the PPS does not mean that clients should not perform due diligence before making investment decisions.



NL is a country with no securities laws. LS is a country that has securities laws that are less strict than the AIMR code of ethics while MS has securities laws that are stricter than the code of ethics. A securities trader lives in MS but conducts his business in LS. His behavior is governed by MS laws. However, the MS law states that the applicable business laws are the local laws where the business is conducted. In that case, the trader must adhere to:

  1. LS business laws.
  2. AIMR code.
  3. MS business laws.
  4. a combination of MS and LS business law.

Answer(s): B

Explanation:

An AIMR member must always adhere to the code of ethics, unless the laws governing his/her behavior are stricter, in which case, the stricter laws must be followed. In this case, since the LS law applies to the trader's business behavior, the trader must follow the stricter AIMR code of conduct.



Standard III (B) is ________.

  1. None of these answers
  2. Disclosure of Additional Compensation Arrangements
  3. Responsibilities of Supervisors
  4. Disclosure of Conflicts to Employer
  5. Obligation to Inform Employer of Code and Standards
  6. Duty to Employer

Answer(s): F

Explanation:

Standard III (A) deals with the Obligation to Inform Employer of Code and Standards. Standard III (B) deals with the Duty to Employer. Standard III (C) deals with Disclosure of Conflicts to Employer. Standard III (D) deals with Disclosure of Additional Compensation Arrangements. Standard III (E) deals with Responsibilities of Supervisors.






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