Few questions from CFAI ethics exam

Available on http://webapp2.aimr.org/aimr/Register.asp?SESSION=1056824018437627 First - the questions only Vidovich received a year-end gift of a set of new golf clubs from a client who was delighted by the performance of her portfolio, managed by Vidovich. Vidovich may do all of the following EXCEPT: A. Accept the gift, keeping the matter confidential. B. Accept the gift and donate it to charity. C. Decline the gift. D. Accept the gift and disclose its receipt to his employer. Question 33 of 49 Sheramy, a portfolio manager for Woodbridge Investment handles the account of Zamborino, a client of the firm. Zamborino offers to pay Sheramy a $100,000 bonus over and above her compensation from Woodbridge Investments if Sheramy achieves an 18 percent annual return for Zamborino’s account. Sheramy: A. Can accept this offer and disclose the bonus to her employer only if she actually achieves the performance target and receives the gift. B. Cannot accept this offer because it will interfere with her independence and ability to be objective regarding investment decisions and recommendations. C. Can accept this offer as long as she discloses the arrangement to her employer. D. Cannot accept this offer because it is outside of her primary employment relationship with Woodbridge Investments. Question 16 of 49 Which of the following statements regarding research reports is/are CORRECT according to the Standards of Practice Handbook? I. Members should outline known limitations of their analysis. II. Reports should be supported by background and supporting information, and this information should be available to interested parties. III. Members must include all relevant factors in research reports. A. I and II. B. II and III. C. I, II, and III. D. I and III.

For the Vidovich answer (D) was wrong - you cannot accept the gift and disclose to your employer However for Sheramy answer © was correct - you CAN accept a $100k bonus and disclose to your employer I’m not sure how the two situations are different - if anything the golf clubs would certainly be worth more than 100k. Unless the difference is that the 100k bonus was disclosed PRIOR to being received, and the golf clubs after? The former would affect independence & objectivity more in my opinion.

I believe you’re allowed to accept it as long as you get written consent from all parties involved. I believe the first one is assuming you receive the gift, then tell your employer (this is additional compensation agreements which falls under duties to you employers). I believe the second question is assuming the arrangement was already disclosed and accepted.

Oh wait - stupid me. The Vidovich question was what he CANNOT do - I answered thinking the question was what he can do. I guess A was the correct answer then. (slaps forehead and slinks away from forum)

Q16) D ?

serf_dude, are these from the sample exam or this is some other website?

Q 16 - C

The sample exam - I know the answer for 16 is NOT c for sure (because I got that wrong). Not sure what the correct answer is though

i believe 16 is A. You don’t have to include all relevant factual information. You can disclose that more information is available on request.

edit my boneheaded mistake…