Ethics

CFA Level I
#1

Rach, CFA, managed an account for Joe for the past decade and has a very good relationship with her client. Joe has a beach house and offers Rach and her family 2 free weeks at the house as a reward for good returns generated in her acct, Rach is so busy at work, she does not tell anyone where she is going for vacation. When accepting the offer from Joe, Rach least likely violated which standard: A. Loyalty to employer B. Disclosure of conflicts C. Independence and objectivity D. Additional Compensation Arrangements

#2

A… She hasn’t done anything to his employer

#3

Just playing devils advocate. hasn’t she violated her employer by not telling her of the arrangement?

#4

toche. But she only forgot b/c she was working so hard at work! :-p

#5

lol, I wonder what the answer is

#6

You don’t have the answer!?! You’re killing me here.

#7

I’ll go with D on this one.

#8

Interesting… Is there anything else to note w/ Additional Compensation Arrangements other than, "You must disclose to employer / clients of additional compensation?

#9

lol sorry, It’s either a or d. I mean not telling his employer, I feel, would be a violation of both but more of a violation of additional compensation arrangements. No? isn’t that the whole basis for the that standard?

#10

I’d pick C

#11

i liked C too. just because of the agreement, he didn’t necessarily violate C. but he did violate the others.

#12

nah they mention C as part of the violation in the explanation.

#13

The standards require that members not accept gifts or compensation that might reasonably compete with their employer’s interest unless they obtain written consent from all parties involved. Arrangements such as that offered to Rach may cause a conflict of interest or result in partiality that could impede Rach’s independence and objectivity

#14

D is definitely a violation, so it must be A

#15

true. i guess by my logic, that A wasn’t necessarily violated either.

#16

I remember seeing this question on a mock. I chose A. C- is def. incorrect.

#17

Bump This is a trick question. The answer is A & D, but it asked which standard. So the answer is: A) Standard IV: Duties to Employers but specifically, violated: Standard IV: Duties to Employers - IV (B) Additional Compensation Arrangements