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Study Session 2: Ethical and Professional Standards: Application

last minute advice on Ethics

I’m looking for advice on how to master Ethics at the 11th hour. I had hoped my scores would improve after practice tests, topic tests, working through all the EOC problems from CFAI, but my scores are pitiful (I got 50% in the last Schweser exam I took).

Investment "capacity" - Ethics Standard V(B) Communication with Clients

I’m spending too much time on this stuff.  

Regardless, let me ask the forum for clarification:

In the  Ethics Standard V(B), the institute calls out Identifying Risks and Limitations associated with our analysis/recommendations (page 139, bottom).  They also suggest we discuss any limiting factors, such as investment liquidity or investment ‘capacity’.  

They define capacity as “Capacity is the investment amount beyond which returns will be negatively affected by new investments.”

How to improve Ethics knowledge - TIPS

Hey Guys,

I really get confused on how to score well and conceptual create a basis on what is right or wrong. Sometimes, the options are too close and its very difficult to choose. Any suggestions from now, how can i improve my score in the next week.

Fair dealing

Allocate orders based on the order size and not depending on the portfolio size (even for IPOs) Different levels of services do not applicable to allocation of IPO shares Are the above statements correct? Tx

Independence vs Additional Compensation

The two standards in question: Independence and Objectivity AND Additional Compensation both talk about gifts etc to the asset manager. 

The former requires disclosure of the gift only and the latter requires written consent. 

How do I distinguish between the gifts in the exam i.e. whether the gift needs to be disclosed or requires a written consent. 

Kindly look at the attached file.

Relevance of memorizing Recommended Procedures for Compliance

Hi everyone,

I am currently struggling with the  way to learn Ethics. Do you think it is useful to memorize the Recommended Procedures for Compliance (RPC) for each section of the 7 Standards of Professional Conduct? It would be a lot to  memorize and I am not sure if it is worth the effort. How do you guys handle the RPCs?

2014 Level II MPS according to 300 Hours

I recently read a post on this forum where someone said the MPS was around 63% according to one scoring matrix that passed. I purchased the 300 hours CFA exam analysis last night and they believe with several thousand observations that the MPS for 2014 was 67% (or 81 questions). There was also a higher number of passing candidates last year (46%) with a higher MPS than previous years.

If the mps is 67% this year, I’m f****d. Oh well, back to this 5th of Jack and 1998 Stone Cold Steve Austin clips on youtube.

Anyways, take this for what it’s worth. Good luck everyone!

Ethics Example

Jim Beaver, CFA, recieves a call from a client insisting he add a stock to his portfolio ASAP.

The client informs Beaver that he has obtained non-public material information, and is certain that the stock will increase substantially in the following days.

Should Beaver place the order?

ethics research linkage

If they give research analysts bonuses based on performance of the investment banking division is that considered a direct relationship and a violation or indirect bc its just a bonus?  or does the bonus have to be on overall perfromance of the company?

Does anyone have suggestions on things that reoccur that are recommended vs required?

I know pro-rata block trades is a recommendation that keeps coming up