David Sanders is the Chief Investment Officer at a money management company that claims it is in compliance with CFA Institute Soft Dollar Standards. Last year he purchased a Bloomberg system for the portfolio managers to get information concerning investment decisions. He used soft dollars from brokers to pay for the system. Because the system has come up for renewal, he has an assistant audit the use of the terminal for a week. The assistant reports that the system is only used about 20 percent of the time for investment decision-making activities and 80 percent for other uses. Sanders: A) can use soft dollars to pay for 20 percent of the system for the next year and must reimburse clients for 80 percent of the cost of last year’s system. B) cannot use soft dollars to pay for any part of the system for the next year, but need not take any action concerning last year’s soft dollars. C) can use soft dollars to pay for 20 percent of the system for the next year and need not take any action concerning last year’s soft dollars.
Good question…Not sure about the reimb… I’ll guess A.
i doubt a reimbursement is necessary…maybe recommended, probably not required. so i’ll say C.
Bill Williams, CFA, has been tasked by his firm, Null Investments, to ensure that the firm’s policies and procedures allow its research department to maintain its independence and objectivity. One of the objectives Williams has outlined for Null’s policies and procedures is that they should promote the establishment of a non-governmental regulatory body. This body will be responsible for creating standards that assure that research firms produce independent and objective research. Is this objective for Null’s policies and procedures consistent with the objectives of the CFA Institute Research Objectivity Standards (ROS)? A) No, the ROS support the establishment of laws to assure independent and objective research but do not support a regulatory body. B) Yes. C) No, the ROS are intended to promote self-regulation to assure independent and objective research.
i thought you were doing ss 17 and 18 as of last night…give up on those?
Your answer: C was correct! Sanders must make a good faith estimate for the proportion of the system that is used for investment decision-making and use that proportion to determine the amount of money that can be used for soft dollar purchases. He need not take any action with respect to last year’s expenditures. Your answer: B was incorrect. The correct answer was C) No, the ROS are intended to promote self-regulation to assure independent and objective research. Among the objectives of the CFA Institute Research Objectivity Standards is the goal of promoting industry self-regulation through the voluntary adoption of standards that promote and reward independent and objective research.
the show NY Wrote: ------------------------------------------------------- > i thought you were doing ss 17 and 18 as of last > night…give up on those? Tying up SS17, doing some ethics as a break during my lunch. I’m starting reading 63 shortly.
is this your first pass through of 17 and 18?
Yes.