Schweser Ethics Q

CFA Level III
#1

Question ID#: 93175

Futura Investments Co. decides to diversify its current portfolio with stocks from three companies in a new segment of the biotechnology industry. William Burgin, CFA, is an analyst at Futura and had previously bought shares of the same three companies for his own portfolio, well before his employer started researching them. Burgin has already disclosed the composition of his personal portfolio to Futura Investments, to be in compliance with the Code & the Standards. Which of the following actions should Burgin take?

A) Hire a full discretionary power or blind trust manager for his portfolio. B) Diversify his personal portfolio so, in this way, these stocks will no longer represent a substantial portion of the portfolio. C) Open an account that will be managed by someone else but will allow him to maintain his investment preferences.

#2

A.

isnt this more ethics?

#3

changed it

#4

whats the answer?

#5

A

#6

Woo hoo!

#7

You ready for the exam Igor?

#8

im doing alrlight in the schweser exams, just did 2012 mock today planning to do 2011-2010 this week.

reviewing my notes and then blue box and/or CFAI EOC. still havnt looked at GIPS, ethics, and swaps

how do you feel?

#9

Any explaination? Those options are bs… he can’t manage his own portfolio just because his employer wants to add a position that he owns?

#10

This is my third time writing it, but first time I actually put some time into it.

Im going through the blue boxes in the cirriculum right now, going to go through my written notes, and write two more AM mocks.

i dont have an explanation for the answer, i just remember that question

#11

Burgin followed Standard VI(A) and informed his employer about the potential conflict of interest. He needs to follow the CFA Institute Standards in the best interest of his employer. To prevent any future problems with conflict of interest, his best option is to discontinue the active management of his personal portfolio and use a blind trust.

#12

good luck!

have you had a chance to look at the 2009-2007 mocks, is it worth doing them,?

#13

Not sure why exactly he needs to do anything at all. If he pre-clears his trades and provides full disclosure , he will not be in any conflict .

#14

Agreed Jana, but out of the choices they give and the framing of the question I think A would be the best choice.