2 ethics questions

(1) you’re a citizen of country A, you do business in country B. the degree of strictness is A higher than AIMR standards higher than B, which law/standards you should abide by? (A) country A (B) AIMR © country B (2) you’re a Portfolio manager. Your broker tells you to buy a stock. The broker made several correct recommendation before. Should you take action to buy?

1.A 2. Buy only after you have researched and have reasonable backing for your decision. Else don’t buy.

(A) country A (2) no, you need diligence and reasonable basis otherwise it’s a violation edit: actually i guess for #2 you could buy for yourself, but not for a client.

(1) If your contract with that entity that you’re making business with states that the law of country B applies, you should follow the Code. Otherwise, follow country A. You cannot follow country B. (2) If you have reason to believe that his/her recommendation is incorrect, no. If you don’t, then I would say yes, you can buy.

I agree with tsttse, 1) Always choose the most strict standard 2) Goes back to the diligence and resonable basis from the SOPH.

  1. A - The more stringent rule is applicable. 2) No, buying would be a violation of CFA Standards.

If you guys are CFA I grader, I would be happy

any other opinions on these 2 questions?

1 - AIMR 2- No, until u’ve reserched it

I don’t understand. if your broker gives you a recommendation to buy a security why can’t you buy it? just because you’re a portfolio manager? As long as it’s not on the restricted list, you preclear it thru your company and it’s not a security your offering to your clients at the time, you are def aloud to purchase the stock. And for question 1, the question is kinda worded all messed up but based on what’s there I’m assuming your saying Country A has stricter laws than Country B AIMR laws are stricter than Country B So the Answer is A) because Country A has the strictest laws

1- AIMR 2- No, not until you have researched its reasonable

what’s the answer portfolio?

Hello abomnia, how do you know it should be AIMR standards? Thanks. The answer for the other one is Yes, you can buy. abomnia Wrote: ------------------------------------------------------- > 1- AIMR > 2- No, not until you have researched its > reasonable

Is it tricky question? I guess CFAI standards replaced AIMR

I think the first question is badly written - it doesn’t matter what country you are a citizen of (I have three passports - which country’s rules should I follow?). Where is the business based? If you work in Country B, then you should follow AIMR, but it is not clear what ‘do business means’. Unless by saying ‘you are a citizen of’ it is implying that that is where you work, in which case Country A’s rules would apply. and this must be an old question --> AIMR??

i thut it was always the stricter law. is that not true

well if u follow the stricter law u should be “above standard” on the less strict law only if there is a conflict with local law u should follow the local but u have to disclose. (I never heard of laws promoting insider trading :wink: for the other one: u need some dilligence before buying