- 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 and III. D. I, II, and III. 2. Which one of the following statements is INCORRECT: A. Members must comply with the Code and Standards, in the absence of any applicable law. B. Members must not engage in conduct that is legal if such conduct violates the Code and Standards. C. Members must comply with the Code and Standards even when doing so would conflict with applicable law. D. Members must comply with the applicable law or regulation related to their professional activities. 3. If a CFA Institute member believes that the activity of his or her co-workers is unethical or in violation of the Code and Standards, the member should: I. Confront the person engaging in the unethical conduct. II. Attempt to stop the behavior by bringing it to the attention of their employer. III. Dissociate from behavior by resigning, if necessary. A. I only. B. I and II. C. II only. D. I, II and III. 4. Reese is portfolio manager for several clients. She uses the work of the highly skilled research analysts in her firm to support her investment decisions. A. Reese: Complied with the Code and Standards. B. Violated the Code and Standards because she was unfamiliar with the processes and procedures used by the analysts in coming to their conclusions. C. Violated the Code and Standards because she did not exercise diligence in making her investment decisions. D. Violated the Code and Standards because she did not independently verify the research herself. 5. Gaines, a financial analyst for Skinner Investment Counseling, is told by the investor relations representative for Firebird Avionics, a major aircraft parts manufacturer, that the firm is in the final stages of building a new fuel efficient jet engine. This information is divulged by Firebird at the most recent quarterly conference call for analysts. Gaines uses this information along with other information he obtained from the company and distributed to the public in a research report that includes a “buy” recommendation for Firebird stock. Which of the following statements is CORRECT: A. Gaines violated the Code and Standards because he failed to separate opinion from fact. B. Gaines violated the Code and Standards because he used material nonpublic information. C. Gaines violated the Code and Standards because he has a material misrepresentation in his report. D. Gaines’ actions did not violate the Code and Standards. 6. 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 Braveheart’s conflict of interest is adequate but the disclosure related to McFiggen’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 McFiggen’s conflict of interest is adequate but the disclosure related to Braveheart’s conflict of interest is inadequate.
- B 2. C 3. D 4. A 5. B 6. A
1.A. 2.C. 3.D. 4.A. 5. discussed before, D. 6.C.
F’in Schweser Ethics! Waste of time. 5. Many times an analyst conference call does not count as dissemination and therefore the information is material nonpublic. 6. Should be C now that I looked closer at it.
I think these are from the ethics questions on CFAi website. At least 5 is. Check this out: http://www.analystforum.com/phorums/read.php?11,865644,865644#msg-865644
Well, one thing for sure is I need to read the SOPH again and do all the CFAI Text questions following. Ethics is one of my strongest areas since I worked next to compliance at my old firm, so it just sucks when I see I’m wrong since our old firm went by the book with ethics (SOPH Handbook).
You know the real exam Q are not that convoluted. One or 2 wrong out of 18 still gets you >70 on the topic. You’ll do fine.
anyone know the correct answer to number 1 ??? thanks
C C D A D C Map1 - looks like we disagree one #1.