Help needed with the following questions. Thanks in advance. As part of his responsibilities as a research analyst, Gonzalez, along with several other analysts, takes a tour of the corporate headquarters and meets with management of a large electronics company in Asia. The company pays for the travel and accommodations of all the analysts participating in the 2-day tour and hosts a dinner, a golf tournament, and a sightseeing excursion for them as part of the trip. Under these circumstances, Gonzalez: 1. May attend the dinner and participate in the golf-tournament and sight-seeing excursion because Gonzalez considers these modest “perks” acceptable in the normal course of business. 2. May accept the reimbursement for the travel and accommodations because the firm paid for all the analysts and did not show favoritism to Gonzalez. 3. Should not accept reimbursement for his travel and accommodation expenses and should not attend the dinner or participate in the golf tournament as doing so may impinge on Gonzalez’s independence and objectivity. 4. May attend the dinner and participate in the golf tournament and sight-seeing but not accept reimbursement for travel and accommodations. Which of the following statements clearly CONFLICTS with the recommended procedures for compliance presented in the Standards of Practice Handbook? 1. Prior approval must be obtained for the personal investment trans¬actions of all employees. 2. Personal transactions include transactions in securities owned by the employee and members of his or her immediate family and transactions involving securities in which the employee has a beneficial interest. 3. Investment recommendations may be changed by an analyst without prior approval of a supervisory analyst. 4. For confidentiality reasons, personal transactions should not be compared to those of clients or the employer unless requested by regulatory organizations. Which of the following statements regarding research reports is/are CORRECT according to the Standards of Practice Handbook? I. Members should outline known limitations of their analysis. II. Reports should be supported by background and supporting information, and this information should be available to interested parties. III. Members must include all relevant factors in research reports. 1. II and III. 2. I, II, and III. 3. I and III. 4. I and II. Which of the following statements regarding research reports is/are CORRECT according to the Standards of Practice Handbook? I. Members should outline known limitations of their analysis. II. Reports should be supported by background and supporting information, and this information should be available to interested parties. III. Members must include all relevant factors in research reports. 1. II and III. 2. I, II, and III. 3. I and III. 4. I and II. Choi is a part of a research team that is collectively responsible for producing investment analysis for his firm’s portfolio managers. The research reports of the group contain all the names of the analysts on the research team. Generally, Choi agrees with the conclusions and recommendations contained in the reports published by the group, but occasionally he holds a minority view. In the report on a particular automotive company, Choi believes prospects for the company are dim while the remainder of the research group are optimistic about the company’s future. The final report recommends that investors buy stock in the company. Choi should: 1. Insist that his name be removed from the report. 2. Write his own report and publish it separately. 3. Inform his supervisors that, unless he dissociates from the report, he will be in violation of the Code and Standards. 4. Cooperate with publishing the report but document his difference of opinion with the research team.
Q1: 4 Q2: 4 Q3: 2 (choi) Q4: 3
Q1, 2 Q2, 4 Q3, 2 Q4, 4
My choice is Q1: (3) should not accept, because by doing so it will affect his objectivity and independence Q2: (4) this may vilotate the duties to client and employer Q3: (2) Q4: (1)
I think that correct answers are: 2. May accept the reimbursement for the travel and accommodations because the firm paid for all the analysts and did not show favoritism to Gonzalez. 4. For confidentiality reasons, personal transactions should not be compared to those of clients or the employer unless requested by regulatory organizations. 2. I, II, and III. 4. Cooperate with publishing the report but document his difference of opinion with the research team.
I answered the following and were all wrong. 1. 4 (no idea which one is correct) 2. 2 (Now I get it, thanks Sondin for pointing choice no. 4) 3. 2 (No idea at all why it’s not choice no. 2) 4. 3 (no idea which one is correct). Cheers.
Theres a trend here; we have everyone agreeing on Qtns2 and 3. Pass rate on ethics will depend on personal interpretations of 1 and 4. Problem is whos right and Who would put this beyond doubt, and above all how can we get it right first time, without guess work? am curious…
Maparam, what were the correct answers? Thanks.
Answer is 2 He may accept the reimbursement for the travel and accommodations because the firm paid for all the analysts and did not show favoritism to Gonzalez. Answer is 4 There should be compliance procedures in place, to keep a check on personal transactions Answer is 1 Statement II ad III are correct. Regarding I, you can’t possibly know all the limitations of the analyst working under you (then how would you be indifferent from God) Answer is 4 She agrees with the end conclusion, but has some minor differential view, so she can add her name to the report and document the difference in opinion. She does not need to remove her name from the report as she agrees with the final conclusion Lemme know if I am correct? - Dinesh S
2 4 3 4
3 4 2 4 Dinesh, for Q3 it says outline KNOWN limitations, obviously you can’t outline what you don’t know. Just pointing it out, not saying I’m right or anything…
4 4 2 4
Here are my choices: 3 4 2 4 maparam can you provide the answers already- do not forget to do that for the other ethics questions you posted earlier.
dunno LongOnCFA, it’s all about the gut here… anyways, we are very closed to solving a Quant Labelling problem here. (2)^4 replies needed… maparam, please break the silence… before the exhaustive replies get depleted… - Dinesh S
4 (he cant accept reimburs. for travel but able to participate in comptetition and sight seeings) 4 4 (Should mention only material relevant factors) 1 As in S and P handbook
This is what I think: 3 4 2 4
Folks, I don’t have the correct answers either. BTW, I got all these questions from the CFA Institute self-test. Click the following link to try it urself. http://webapp2.aimr.org/aimr/Register.asp?SESSION=1056824018437627
3, 4, 2, 1.
Are you sure it is from CFAI? I did not register. It looks like spam website.
Ok. Look like some of you have tried it in other thread. It should be good. It looks a bit funny though. Is this an old website of CFAI?