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Free CFA-Level-I Exam Braindumps (page: 92)

Page 92 of 991
PDF with 3963 Questions

When formulating an investment policy for a client, which of the following falls under "investor objectives?"

  1. investable funds
  2. time horizon
  3. risk tolerance
  4. proxy voting
  5. liquidity needs
  6. none of these answers

Answer(s): C

Explanation:

Risk tolerance is considered under "investor objectives." Liquidity needs, time horizon, proxy voting and investable funds are considered under "investor constraints."



Standard III (F) is ________.

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

Answer(s): E

Explanation:

There is no Standard III (F).



An AIMR member who lives in Atlantis, where some laws are stricter than the AIMR Code of Ethics and others are less strict, should follow:

  1. Atlantis' laws, since the member resides in Atlantis.
  2. A combination of the two which results in a stricter set of laws.
  3. AIMR code, since the code is a strict set of rules.
  4. Not clear from the information provided.

Answer(s): B

Explanation:

A member must always abide by the AIMR code (Standard I), unless the local laws in any given case are stricter, in which case, the stricter standard applies.



In order to comply with Standard IV (B.4), Priority of Transactions, firms should prepare and distribute to firm personnel a code of ethics and compliance procedures.

The code and procedures should do all of the following, EXCEPT:

  1. establish reporting and prior-clearance requirements.
  2. ensure that procedures will be enforced.
  3. consider special situations.
  4. contain disciplinary procedures.
  5. define personal transactions, investment and prohibited transactions.
  6. maximize the number of access persons.

Answer(s): F

Explanation:

The question deals with the compliance procedures under Standard IV (B.4). Personal transactions must be defined to all employees. The number of access persons - those who have knowledge of pending or actual recommendations or action - should be limited, by implementing Fire Walls.






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