Tara Bailey was a very strong proponent of Biloxi, Inc. due to a friendship with its founder. She has let her positive feelings for the firm color her research report and has allowed her optimism to be translated into certainty. She has violated all of th

CFA Level I
#1

Tara Bailey was a very strong proponent of Biloxi, Inc. due to a friendship with its founder. She has let her positive feelings for the firm color her research report and has allowed her optimism to be translated into certainty. She has violated all of the following standards EXCEPT: A) IV(B1), Fiduciary Duties. B) III©, Disclosure of Conflicts to Employer. C) IV(A1), Reasonable Basis and Representations. D) IV(A3), Independence and Objectivity.

#2

A

#3

B) III©, Disclosure of Conflicts to Employer. IMO, simply because there is no mention of her not informing her employer of the conflict

#4

B

#5

I’m going with B

#6

wait is 'C) IV(A1), Reasonable Basis and Representations. ’ an actual standard? i thought it was diligence and reasonable basis

#7

I vote for B, however, the answer is A, here’s the explaination, which doesn’t make sense to me: A She is violating all of the above except Standard IV(B1), Fiduciary Duties. Biloxi is not a client and Bailey owes no fiduciary duty. Her objectivity is compromised by her relationship with the founder. She has not disclosed this to her employer, and she does not have a reasonable basis for representations about the firm

#8

Fiduciary has to do with portfolios, not research. She is an analyst.

#9

yeah, given the explanation A sounds the right answer. :slight_smile: But I’d say she has violated fiduciary duty to if that report is going to go to any of the client.

#10

I thought fiduciary duties were actually investing for the client, as in staying within the guidelines of their objectives. Not giving biased reports. No money was invested at this point.

#11

Fiduciary duty is sort of a blanket responsibility to do anything and everything that is in the best interest of the client…not matter if the money has been invested or not… I still go with B though…also, after taking the CFAI exam I am pretty confident that CFAI designs questions that are free from problems as such the question above…or people could challenge and it gets thrown out…

#12

CFA Insitute knows how to screw you up but don’t give you a chance to challenge it. That’s why they: (1) never give you a specific score, they give your score in 6-7 sections, each section fall into one of the 3 ranges (2) assign very strong army of exam proctors to take away your exam paper from your desk and put them in a black box which can’t be bombed open even with an atom bomb. BlueCollarHero Wrote: ------------------------------------------------------- > Fiduciary duty is sort of a blanket responsibility > to do anything and everything that is in the best > interest of the client…not matter if the money > has been invested or not… > > I still go with B though…also, after taking the > CFAI exam I am pretty confident that CFAI designs > questions that are free from problems as such the > question above…or people could challenge and it > gets thrown out…