On my side: 1) C 2) B 3) D 4) D 5) A 7) C 8) B 9) B 10) A 11) b 12) C I do not know why this is D 13) C
singlesong80 Wrote: ------------------------------------------------------- > BARTHEZZ, > > Which of the following is LEAST LIKELY to be > > considered a “material” piece of information > > regarding a company: > > > 3. A former CFO of the company predicting > > long-term decline in the company’s stock. > > – here the CFO is an insider - he knows more than > the public > > the fact that CFO is an insider should not make > his opinion less material??? Key here is FORMER CFO…so he don’t have any info on the current situation of the company…
singlesong, LONG is correct - sorry misread the question.
Thanks a million barthezz for the answers!! I have gone through all of them and listed my UNDERSTANDING, Please clear-me if I am wrong on anything here… I dont want to MESS UP ethics in the EXAM. ---------------------------------------- So following are my findings, please let me know if they are in sync with the general AF Junta. 1. We CAN omit facts from research report. 2. Gonzalez should ACCEPT NOTHING in this world, NO reimbursement for his travel and NO accommodation expenses should NOT attend the dinner or participate in the golf tournament. 3. Possessing drugs is NOT a violation BUT you grab a penny more from you employeer you are DEAD 4. When you see something bad happening, a. Confront the person b.Attempt to stop the behavior and c. Resign if necessary 5. IPO participations, discolsure of holdings and pre-clearance are all RECOMMENDATIONS in SOP 6. Gaines used the information from Analyst Conference call and traded on it. Still he did NOT violate anything 7. Reese uses work of the highly skilled research analysts and DOES NOT violate anything 8. 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 CONFLICTS with the SoPH 9. Once you have decided a “SELL” recomendation, even a gun shot will not budge you from that recommendation ----------------------------------------
_______________________________ Guys, got a patience for some more? _______________________________ Question 19 of 49 Phoung has a number of investment management clients. He gives discount from his standard investment management fee rate to clients who have US$25 million or more in their accounts. He also provides personalized service to these clients, regularly checking in with them by phone to discuss new investment opportunities. Phoung: a. Has violated the Code and Standards by not treating all his clients fairly with respect to his investment management fees. b. Has not violated the Code and Standards since the level of investment management fees charged to clients are not addressed by the Code and Standards. c. Has not violated the Code and Standards as long as his increased level of service to some clients has not disadvantaged other clients and he has disclosed his different levels of service to all his clients. d. Has violated the Code and Standards by personally discussing investment opportunities with only larger clients. The D is incorrect ______________________ Question 26 of 49 The corporate finance department of an investment banking firm has decided to compete for the business of Deerlea Corporation. Knowing that the firm’s brokerage unit now has a “sell” recommendation on Deerlea, the head of investment banking asks the head of the brokerage unit to change the recommendation from “sell” to “buy.” The brokerage unit should: a. Assign a new analyst to the company and change the rating. b. Increase the rating by no more than one increment (in this case to a “hold” recommendation). c. Remove the company from the research universe and put it on a restricted list giving only factual information about the firm. d. Reassign responsibility for rating the stock to the head of the investment banking unit. the D is incorrect _____________________ Question 28 of 49 Waters is an investment analyst who has accumulated and analyzed several pieces of nonpublic information through her contacts with drug firms. Although none of the information is “material,” Waters correctly concludes that the earnings of one of the drug firms will be unexpectedly high in the coming year. Waters: a. Should urge the drug firm to make public dissemination of the information immediately. b. May use the information, but only after approval from a compliance officer or supervisory analyst. c. Cannot legally invest or make investment recommendations based on this information. d. Can use the information to make investment recommendations and decisions. the A is wrong
singlesong80 Wrote: ------------------------------------------------------- > my fault. > > So now I figured out all the correct answers, but > I am not convinced! > > Zamorski, an investment manager, has a number of > clients who have indicated that they do not wish > to take on any additional risk in their > portfolios. Zamorski attends a conference on a > new type of derivative that has the potential to > significantly increase portfolio performance but > also increases the amount of risk to the > portfolio. She invests in these new securities > for all of her clients with great success. > Zamorksi: > Has not violated the Code and Standards because > the investment strategy she employed made money > for her clients. > Has violated the Code and Standards by investing > in securities that increase the amount of risk in > her clients� portfolios. > Has not violated the Code and Standards because > the amount of additional risk incurred for her > clients is well within the parameters that the > clients can tolerate in her opinion. > Has violated the Code and Standards by not > following the investment parameters set forth by > her clients. > > WHY B IS NOT CORRECT TOO? Because if the clients have stated that they can accept bigger risk for bigger potential return, then this is not a violation. Simply investing in a risky asset as itself does not comprise violation.