- If an investment advisor who operates as a sole proprietor and has five clients obtains employment with a brokerage firm, he: A. Must get consent from his new employer to keep his clients but does not have to advise his clients of his employment with the brokerage firm. B. Must get written consent from his new employer to keep his clients and must advise his old clients in writing of his employment with the brokerage firm. C. Does not have to advise his clients of his new employment with the brokerage firm or get consent from his new employer to keep his clients. D. Must advise his clients of his employment with the brokerage firm but does not have to get consent from his new employer to keep his clients. Is C the answer? 2. Which of the following is LEAST LIKELY to be an example of misrepresentation: A. Plagiarizing the work of another analyst in writing a research report. B. Guaranteeing a specific rate of return on the equity securities of a public company. C. Omitting relevant facts from a research report. D. Claiming to have earned an academic degree or professional designation that has not yet been awarded. Is C the answer?
B and B? 1 is duty to employers and clients. All parties have to be notified in writing and written permission from employer is required. For 2, B seems more like communication with clients, and C is misrepresentation of facts.
B for sure on the first one because he needs written permission from his new employer to have a business that competes. He also should give notice to his clients because it is the fair thing to do (Fair Dealing?). C for sure on the second because you aren’t misrepresenting facts. You can choose to leave out facts. There are a bunch of relevant facts out there but your duty is to compile them in the best way, not include all the possible relevant facts.
Q1 - definitely B, this Q is from the self test which I have just completed. I got this Q right, definitely B! Q2 - definitely C
- B anything that can result in conflict of interest require disclosure to all parties. 2. I would say C. I think the only possible answers are B and C. For B, a company could have financial products with guaranteed returns built-in (equity swap) but in this case, it is guaranteeing specific return on equities. For C, it is impossible to include all relevant facts and as long as the report is thoroughly constructed and not purposely misleading, it is not a violation to diligence and reasonable basis or misrepresentation.
BUMP 1) B 2) C
B C without a doubt!
yep 1)B 2)C