Ethics (Re: Mock)

CFA Level III
#1

<1> recommend hedge fund to most conservative investors, where does it say Shao has done enough due diligences??? would hedge fund be suitable to most conservative investors??? <2> think I got that proxy voting Q wrong, it should be disclosed to all clients. but i remember it also mentioned the firm avoid spending time on proxy voting, isn’t that a violation as well because proxies have economic value, firm should properly conduct the vote on behalf of client… since proxies have economic value to clients? <3> just to confirm, the unfilled order should be allocated by size of the order rather than portfolio. (don’t think the order size was given in the case, but it’s wrong to pro rata allocate 2% based on the portfolio (i think that’s what I picked) ;-(?

#2

any ethics guru who’s done mock?

#3

#1. Hedge fund can be suitable to most conservative investors if they don’t mind the liquidity. Hedge funds have shown very low correlations and can actually reduce the overall risk of a portfolio. #2. Proxies must be voted for the benefit of the shareholders but whenever there is a conflict of interest, they can discard the proxies. #3. By size of the order, not portfolio. Anyone else want to chime in?

#4

Everything looks right. #2 they don’t have to vote all proxies.

#5

also, the ques on that intern where the senior teaches him valuation models which she claims are her. agree with the ans that you can take the exp and knowledge with you to the next employer… but i kept thinking if the models are proprietary, then should the person be allowed to use it later in another firm. that seems dodgy. the firm works to create a model, you come for internship learn it and then use it in another firm… not sure

#6

thanks for the confirmation guys. one more on disclosure: under standard: member should disclose proxy-voting policy under asset manager code: member must disclose proxy-voting policy right?

#7

the methodology can be used (maybe for the purpose of re-creating the model) but if she takes the model without former employer’s consent, it would be a violation…