Sue Parsons, CFA, works full-time as an investment advisor for the Malloy Group, an asset management firm. To help pay for her children’s college expenses, Parsons wants to engage in independent practice in which she would advise individual clients on their portfolios. She would conduct these investment activities only on weekends. Which of the following statements about Standard IV(A), Loyalty to Employer, is most accurate? Standard IV(A):
A) requires Parsons to obtain written consent from both Malloy and the persons from whom she undertakes independent practice.
B) does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions.
C) requires Parsons to notify Malloy in writing about her intention to undertake an independent practice.
c? but that may be too easy
A
b? if its on the weekends if shouldn’t affect her work so no need to disclose?
C?
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Def A
Hope this helps
I go with A, she needs consent to compete with her employer.
just because of how you introduced the question i’m gonna say B) does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions.
guessing that it falls under a different standard- additional compensation arrangements?
King_Kong is right,
Your answer: A was incorrect. The correct answer was B) does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions.
Standard IV(A), Loyalty to Employer, requires that Parsons obtain written consent only from her employer before she undertakes independent practice that could result in compensation or other benefit in competition with Malloy. It is not required to get permission from your employer when only preparing to go into independent practice.
king_kong Wrote:
——————————————————-
> b? if its on the weekends if shouldn’t affect her
> work so no need to disclose?
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plz post the answer :)
Hope this helps
B? if that’s right, though, i hear you. so she can prepare whatever, but as soon as she wants to flip the switch and do this on the weekends for real, she needs to get written consent from her employer, etc.
i’d think it’s b b/c it says “preparing”- you can do that.
C is def not right.
A is just worded funny enough for me to stick with B.
sweet! and i haven’t even reviewed ethics yet (waiting until Friday)
B is technically true. So long as she is preparing, she does not need to notify. However, she would need to notify to BEGIN.. and it would need to be in writing and approved as it would be in direct competition with her current employer.
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I would have guessed C since there’s a chance her clients can call her on the weekdays, which could possibly interfere with her current work.
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Nice question.. And that’s why a nice sound sleep on the night before the exam is so impt. It was such a basic questions and missing the ‘preparing’ word will get you crushed.
^ correct mcf. she’d have to disclose in writing the job, expected duration, and compensation and get it approved.
i am going to win this test on ethics. i am so ethical it HURTS.
Beautiful Ethics, haha
I should read that more carefully. If only read question, I would stick with A. The answer played word game, which CFAI loves to do as well…
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June2010 Wrote:
——————————————————-
> King_Kong is right,
>
> Your answer: A was incorrect. The correct answer
> was B) does not require Parsons to notify Malloy
> of preparing to undertake independent practice
> under the current conditions.
>
> Standard IV(A), Loyalty to Employer, requires that
> Parsons obtain written consent only from her
> employer before she undertakes independent
> practice that could result in compensation or
> other benefit in competition with Malloy. It is
> not required to get permission from your employer
> when only preparing to go into independent
> practice.
>
>
>
> king_kong Wrote:
> ————————————————–
> —–
> > b? if its on the weekends if shouldn’t affect
> her
> > work so no need to disclose?
jhahahahaahahahahaha B iis the 1st one i eliminated ……………i jus doint know witrh ethics i always thought to err on the side of over disclosure but that didnt work in this q
Hope this helps
good luck guys, if we don’t pass Level II because of ethics, we’ll have to pay more $$$$ to those fat CFAI staff next year
This question is messing with my mind! Remember the question from mock about the Korean guy taking on additional investment advisory services in his free time 2 nights a week because he doesn’t need a lot of sleep, was in fact a violation??
Same situation, but I thought that as long as it’s a competing work with the employer, you must have written consent whether you do it in your spare time or not!
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frangoya Wrote:
——————————————————-
> This question is messing with my mind! Remember
> the question from mock about the Korean guy taking
> on additional investment advisory services in his
> free time 2 nights a week because he doesn’t need
> a lot of sleep, was in fact a violation??
> Same situation, but I thought that as long as it’s
> a competing work with the employer, you must have
> written consent whether you do it in your spare
> time or not!
Exacly the pattern i recalled
Hope this helps
Don’t worry about this question
Stay with the standards and just be more careful about words. Frankly I believe if this one appears on the exam, it would cause debates because in the question itself, it didn’t say he is only preparing or ready to start.
If he is about to start, he must obtain written consents from his employer and meanwhile tell his weekend client that his firm could provide same service
swaptiongamma Wrote:
——————————————————-
> Nice question.. And that’s why a nice sound sleep
> on the night before the exam is so impt. It was
> such a basic questions and missing the ‘preparing’
> word will get you crushed.
this is absolutely 100% accurate. i completely overlooked the “preparing”word. lesson learned: every single word counts in the ethics section.