Sue Parsons, CFA, works full-time as an investment advisor for the Malloy Group, an asset management firm. To help pay for her children’s college expenses, Parsons wants to engage in independent practice in which she would advise individual clients on their portfolios. She would conduct these investment activities only on weekends. Which of the following statements about Standard IV(A), Loyalty to Employer, is most accurate? Standard IV(A): A)does not require Parsons to notify Malloy of preparing to undertake independent practice under the current conditions. B) precludes Parsons from entering into an independent competitive activity while still employed by Malloy. C) requires Parsons to notify Malloy in writing about her intention to undertake an independent practice. D) requires Parsons to obtain written consent from both Malloy and the persons from whom she undertakes independent practice.
C) the question specifically askes about Standard IV(A), Loyalty to Employer, although i believe D) is correct if the question was in reference to all CFAI Code of Ethics
I think it’s D. Written notification is not enough, written consent is required. Person from whom she undertakes independent practice become her employers.
The answer was actually A. I was thinking C or D myself, that’s why I posted it on here. Seemed too confusing. Here was the reasoning. Standard IV(A), Loyalty to Employer, requires that Parsons obtain written consent only from her employer before she undertakes independent practice that could result in compensation or other benefit in competition with Malloy. It is not required to get permission from your employer when only preparing to go into independent practice.
the qbank seems to have a decent amount of these “since you’re only preparing to do X, you aren’t required to do anything” types of questions. is that how the test really is? it doesn’t seem like that’s testing your knowledge of the code, just your ability to find loopholes.
The flaw in the reasoning supporting (A) is that Sue only works Mon-Fri and the weekend work WILL NEVER interfere with her duties to her employer, that simply cannot be true. Really these questions are ridiculous… either test on the CBOK or don’t, but being able to answer these “trick” questions are no indicator of an analyst’s ability.
actual questions on the exams are pretty straight-forward.
i remember the ethics questions being somewhat tricky and frustrating at 1st. but, if you read thru the standards & practices a few times, do enough ethics questions from qbank, schweser practice exams, and cfai sample exams and you’ll have it down cold. cfai sample exam questions are the closest to the real thing. trust me when i say you’ll breeze thru that section on exam day.