Rachel, CFA, has managed the account of Olga for the past decade and has a very good relationship with her client. Olga has a beach house in the Bahamas and offers Rachel and her family two free weeks at the house as a reward for the excellent returns generated in her account. Rachel is so busy at work she does not tell anyone where she is going for vacation. When accepting Olga’s offer, Rachel LEAST LIKELY violates the CFA Institute Standard relating to: a) Loyalty to Employer b) Disclosure of Conflicts c) Independence and Objectivity d) Additional Compensation Arrangements which one and why, I’ll post the explanation in a few which does nothing but cloud this question even more…
A or D, i like this one, very triky, i
a) Loyalty to Employer
I think I chose C There is no evidence that she knew she would be rewarded. Therefore she wouldnt act in a way to receive the vaction spot.
I would say A. I’m pretty sure it’s considered additional compensation whether she knew about it beforehand or not.
nevermind, It’s A
kant Wrote: ------------------------------------------------------- > I would say A. > > I’m pretty sure it’s considered additional > compensation whether she knew about it beforehand > or not. it says LEAST LIKELY this one is hard
the “answer” “The Standards require that members not accept gifts or compensation the might reasonably compete with their employer’s interest unless they obtain written consent from all parties involved. Arrangements as that offered to Rachel may cause a conflict of interest or result in partiality that could impede Rachel’s independence and objectivity” that’s a clear answer… clear as MUD so what do you think the answer is now?
Yea, she least likely violated loyalty to her employer.
Def. A
questions says least likely…
A - the action won’t injure the firm, or deprive it of profit, or deprive it of advantage of employees’ skills and abilities.
i think it’s b) disclosure of conflicts because there was no prior conflict to disclose of, rachel is a PM NOT a sell-side analyst writing a report for the public/ clients to read. Plus there is no mention of written approval from either party so that rules out (A) in my mind… any thoughts?
KJH Wrote: ------------------------------------------------------- > A - the action won’t injure the firm, or deprive > it of profit, or deprive it of > advantage of employees’ skills and abilities. undisclosed additional compensation could indeed injure the firm or deprive it of profits if the PM is now influenced to favor the clients portfolio at the expense of the firm.
A, well at least i boiled it down to 2, went from 25% prob of right to 50% prob of getting it : )
least likley = Didn’t violate. Therefore it’s A If it was, not least likely, then the answer would of been B,C, and D Not least likeily (double negative) = positive (did violate)
nobody thinks she LEAST LIKELY violated (B)??? again she is not an author of an investment research report…
disclosure of conflicts is not just pertained to research rpt
daj224 Wrote: ------------------------------------------------------- > disclosure of conflicts is not just pertained to > research rpt correct! but how does it pertain to this situation???
I think C. This is a client This is a client.