FYI - CFAI ethics quiz back online

https://www.cfainstitute.org/centre/codes/ethics/self_exam.html CFAI ethics test is back online again, definitely attempt these if you’ve not already done so. The wording/standards are what you’re likely to find in 3 days. Push hard, we’re almost there. Goodluck

Thanks esco. I was looking for it. Checkout and it works fine !

As part of his responsibilities as a research analyst, Gonzalez, along with several other analysts, takes a tour of the corporate headquarters and meets with management of a large electronics company in Asia. The company pays for the travel and accommodations of all the analysts participating in the 2-day tour and hosts a dinner, a golf tournament, and a sightseeing excursion for them as part of the trip. Under these circumstances, Gonzalez: A) May attend the dinner and participate in the golf tournament and sight-seeing but not accept reimbursement for travel and accommodations. B) May attend the dinner and participate in the golf-tournament and sight-seeing excursion because Gonzalez considers these modest “perks” acceptable in the normal course of business. C) May accept the reimbursement for the travel and accommodations because the firm paid for all the analysts and did not show favoritism to Gonzalez. D) Should not accept reimbursement for his travel and accommodation expenses and should not attend the dinner or participate in the golf tournament as doing so may impinge on Gonzalez’s independence and objectivity. I got 48/49 on the test, and that’s the one I got wrong. I put A.

Billy, can you give me the answers for 7, 9, 33 ,34 and 39? thanks

I don’t have the test in front of me anymore. If you post the questions, I’ll be more than happy to.

As part of his responsibilities as a research analyst, Gonzalez, along with several other analysts, takes a tour of the corporate headquarters and meets with management of a large electronics company in Asia. The company pays for the travel and accommodations of all the analysts participating in the 2-day tour and hosts a dinner, a golf tournament, and a sightseeing excursion for them as part of the trip. Under these circumstances, Gonzalez: A) Should not accept reimbursement for his travel and accommodation expenses and should not attend the dinner or participate in the golf tournament as doing so may impinge on Gonzalez’s independence and objectivity. B) May attend the dinner and participate in the golf tournament and sight-seeing but not accept reimbursement for travel and accommodations. C) May accept the reimbursement for the travel and accommodations because the firm paid for all the analysts and did not show favoritism to Gonzalez. D) May attend the dinner and participate in the golf-tournament and sight-seeing excursion because Gonzalez considers these modest “perks” acceptable in the normal course of business. 0 out of 1

  1. When a corporate issuer, seeking to increase their visibility with potential investors, hires an analyst to write research on their company, the analyst must do all of the following EXCEPT: A)Strictly limit the type of compensation received by the company so that the compensation is not based on the content or recommendation contained in the report. B) Disclose in the report that the analyst is being paid by the company to write the report. C) Allow the company that paid for the report to review the analysis and recommendations. D) Engage in thorough, independent and unbiased analysis of the company. ------------------- Which of the following is LEAST LIKELY to be considered a Material piece of information regarding a company: A) Loss of a customer representing a significant portion of a company gross sales. B) A government report of economic trends affecting a company. C) Changes in company management. D) A former CFO of the company predicting long-term decline in the company stock. ------------------- Which of the following is LEAST LIKELY to assist a Member in meeting their obligations with regard to presenting investment performance under the Code and Standards: A) Complying with the Global Investment Performance Standards (GIPS). B) Presenting the performance of the weighted composite of similar portfolios. C) Presenting the performance of a new investment strategy by applying the strategy to historical performance data. D) Making disclosures that explain the performance results being reported. Thanks Billy!

C - You do not need to allow the company to review it. D - All the others are material and will probably cause a significant decline in stock price. However, a former CFO saying that the stock price will decline is nonmaterial because it is the opinion of someone no longer affiliated with the company. It’s tricky, but just assume the former CFO could have any sort of motive for saying that, as he could be disgruntled, etc. That’s more of an opinion whereas the others are fact-based. C - A new strategy being “back-tested” using historical data is not an acceptable format for presenting performance.

Appreciate your help Billy, thanks.

So whats the answer for this question? NByz Wrote: ------------------------------------------------------- > As part of his responsibilities as a research > analyst, Gonzalez, along with several other > analysts, takes a tour of the corporate > headquarters and meets with management of a large > electronics company in Asia. The company pays for > the travel and accommodations of all the analysts > participating in the 2-day tour and hosts a > dinner, a golf tournament, and a sightseeing > excursion for them as part of the trip. Under > these circumstances, Gonzalez: > > A) Should not accept reimbursement for his travel > and accommodation expenses and should not attend > the dinner or participate in the golf tournament > as doing so may impinge on Gonzalez’s independence > and objectivity. > > B) May attend the dinner and participate in the > golf tournament and sight-seeing but not accept > reimbursement for travel and accommodations. > > C) May accept the reimbursement for the travel and > accommodations because the firm paid for all the > analysts and did not show favoritism to Gonzalez. > > D) May attend the dinner and participate in the > golf-tournament and sight-seeing excursion because > Gonzalez considers these modest “perks” acceptable > in the normal course of business. > 0 out of 1

It’s that he should accept nothing apparently.

billy22g Wrote: ------------------------------------------------------- > It’s that he should accept nothing apparently. Seriously? I guess the other answers just ain’t right. The one with “modest perks” is definitely wrong. The one with travel and accomodations reimbursement is also wrong, because of the reason it gave. Sure Gonzalez was not shown favoritism, but this also applies to the golf tournament, sight-seeing and dinner. Now lastly, why would he be allowed to attend the dinner, play golf and go sight-seeing and not be allowed to let the company pay for his travel + accommodations? It probably is a bit overboard by the company to offer analysts so many goodies. Dinner + golf + sight-seeing? That’s probably over-doing it. So we’re left with only 1 choice, and that’s the answer, I guess.

I got this 3 q’s wrong, can some body help me out. Question 26 of 49 Youn is a successful money manager who is confident of her investment management ability and claims in her marketing brochures that her clients “will obtain a significant return on principle” by following her advice. Youn’s statement: A)Is not a misrepresentation if all her past clients made money on their investments with her. B)States an opinion and therefore cannot be a misrepresentation. C) Misrepresents her ability as an investment manager. D)Improperly implies a guaranteed investment return. Question 44 of 49 Saunders, a mining analyst for Hockessin Investments, has completed his analysis of Okun Drilling & Mining for a wealthy client of Hockessin. He has concluded that, based on core samples and geological surveys of land owned or leased by Okun, the company may have in excess of 1 million ounces of gold available to mine. Saunders drafts a research report stating the following: “Based on the fact that the company has 1 million ounces of gold to be mined, I recommend purchasing Okun stock for your portfolio.” If Saunders presents his report to the client, he will have: A) Violated the Code and Standards because he made conclusions based only on his own research. B) Violated the Code and Standards because he did not distinguish between fact and opinion. C) Violated the Code and Standards because he did not indicate the basic characteristics of the investment. D) Complied with the Code and Standards. Question 45 of 49 McFiggen, an analyst, has written a report for Braveheart Investment Research, recommending investors purchase the securities of a new printing services company. McFiggen owns a significant portion of the company’s stock and Braveheart is a large customer of the company. At the bottom of the research report, in a footnote, McFiggen makes the following disclosure, “The author of this report may or may not have a financial stake in the company and Braveheart Investment Research may have outside business relationship with the company that is the subject of this report.” Which of the following statements is CORRECT: A) The disclosure related to McFiggen’s conflict of interest is adequate but the disclosure related to Braveheart’s conflict of interest is inadequate. B) The disclosure is adequate because it alerts readers to the conflicts of interests of McFiggen and his employer with respect to the printing company. C) The disclosure is inadequate as it is not made in a prominent manner and with sufficient specificity to effectively communicate the conflict of interest to clients and prospective clients. D) The disclosure related to Braveheart’s conflict of interest is adequate but the disclosure related to McFiggen’s conflict of interest is inadequate.

Example 1 under “application of the standard” for Standard 1(B) (in the CFAI text) specifically discusses a situation whereby the analyst accepts a charter flight and hotels (the least expensive ones) to inspect company property. This is “…not necessarily violating Standard 1(B)…” So we can accept the bare bones trip as long as there is no OPTION for an excessive gift? But if there is an option…

2 is B, based on the difference between fact and opinion. 3 is C because both disclosures do not disclose the actual relationship. They are too ambiguous. For the answer to 1, check the other threads. I’ve already answered that one.

thank you billy22g

Can somebody help me out with these…i thought i read somewhere else that your allowed to de-emphasize the negative factors. Thanks! Lautenschlager has completed her due diligence on a petrochemical company and is preparing to issue a somewhat negative report on the company that will include a “sell” recommendation. She gives a final draft of the report to company management to review for factual accuracy. The CEO of the company is highly upset by the report and threatens to cut-off her access to company officials and bar Lautenschlager from conference calls and other avenues of communication with the company if the report is published. Lautenschlager’s BEST course of action is to: a. Publish the report with the analysis intact, but remove the “sell” recommendation. b. Revise her analysis of the company in light of management’s objections to the report. c. Allow company management to make revisions to de-emphasize the negative factors but maintain the “sell” recommendation in the report. d. Publish the report as written, regardless of the objections by company management. Zeller and Toffler have both passed Level II of the CFA Exam Program. Zeller circulates a resume stating that he is a candidate for the CFA designation and has passed Level II of the CFA Program. Toffler circulates a resume stating that he is a “CFA, Level II.” Which of the following statements are CORRECT: a. Both Zeller and Toffler have violated the Code and Standards. b. Neither Zeller nor Toffler has violated the Code and Standards. c. Only Toffler has violated the Code and Standards. d. Only Zeller has violated the Code and Standards.

1 D - nah it’s objectivity. There are examples of times when management points out a factual mistake, and the report is adjusted in response to it. But if management disagrees with the outcome, recommendation, tone etc: Tough bananas. Your professional judgment should still stand. 2 - D - The SPH states that there is no “Level II CFA” designation. No “CFA Degree” etc. But you can say that you’ve passed the test. See page Vol 1 page 106 for a very detailed description of what you can and cannot say.

thanks a lot Nbyz

For everyone who needs good explanations of the questions, use the search function and type in “ethics quiz”…there is a wealth of good information on there for you to pour through.