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Free CFA-Level-I Exam Braindumps (page: 95)

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Currency overlay portfolios must be valued at least ________.

  1. monthly
  2. yearly
  3. quarterly
  4. hourly
  5. daily

Answer(s): C

Explanation:

In accordance with the AIMR-PPS, currency overlay portfolios must be valued at least quarterly, but because of the volatile nature of these portfolios, firms may need to revalue currency overlay portfolios more frequently than quarterly to obtain full and fair disclosure.



Standard III (A) deals with ________.

  1. None of these answers
  2. Obligation to Inform Employer of Code and Standards
  3. Professional Misconduct
  4. Use of Professional Designation
  5. Plagiarism
  6. Duty to Employer
  7. Disclosure of Conflicts to Employer
  8. Fundamental Responsibilities

Answer(s): B

Explanation:

Standard I deals with Fundamental Responsibilities. Standard II (A) deals with Use of Professional Designation.
Standard II (B) deals with Professional Misconduct. Standard II (C) deals with Plagiarism. Standard III (A) deals with the Obligation to Inform Employer of Codes and Standards. Standard III (B) deals with the Duty to Employer. Standard III (C) deals with Disclosure of Conflicts to Employer.



Standard III (D), Disclosure of Additional Compensation Arrangements is important because

  1. outside arrangements may affect loyalties and objectivity and create potential conflicts of interest.
  2. none of these answers.
  3. outside arrangements are not allowed under circumstances.
  4. third parties are inherently in competition with the current employer.
  5. the verbal disclosure requirement allows for "compensation in kind."
  6. all of these answers.

Answer(s): A

Explanation:

Under Standard III (D), members must disclose outside compensation/benefits to employers because outside arrangements may affect loyalties and objectivity and create potential conflicts of interest. Disclosure thus allows an employer to consider the outside arrangements when evaluating the actions and motivations of members. Moreover, the employer is entitled to have full knowledge of compensation/benefit arrangements to assess the true cost of the outside services members are providing.



Which of the following is/are required by AIMR-PPS with regards to creation and maintenance of composites?

  1. All actual fee-paying discretionary portfolios must be segregated into one or more composites based on similar investment strategies.
    II. Portfolios must not be switched from one composite to another unless documented changes in client guidelines make the switching appropriate.
    III. Composites must include all terminated portfolios while calculating performance for periods prior to the termination.
  2. II only
  3. I, II and III
  4. I and II only
  5. II and III only

Answer(s): D

Explanation:

All actual fee-paying discretionary portfolios must be included in at least one composite based on similar investment strategy. Segregation of these accounts is not required. (II) and (III) are true.






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