Question: 17 - 29241 Ruth Mayer, CFA, recommends Monolo, Inc. to all of her clients as a strong buy. Ruth is on the board of Monolo and her firm is in talks with Monolo for the rights to lead the syndicate of investment banks in the upcoming equity issue. Monolo promises to put Ruth’s husband on the board of a subsidiary if she can significantly increase interest in Monolo’s stock. Ruth is violating which standard(s) from the Code and Standards in this scenario? 1. Standard IV(B7), Disclosure of Conflicts to Clients and Prospects. 2. Standard IV(B2), Portfolio Investment Recommendations and Actions. 3. Standard IV(B1), Fiduciary Duties. 4. Standard III(D), Disclosure of Additional Compensation Arrangements. A) I, II, IV. B) II, III, IV. C) I, III, IV. D) I, II, III, IV.

I think its a or d. I am going to guess d!

Question: 18 - 29280 There are several procedures to adopt and comply with Standard IV(B3), Fair Dealing. All of the following are procedures the firm should employ EXCEPT: A) require board approval for all recommendation changes. B) limit the number of people privy to recommendations and changes. C) shorten the time frame between initiation and dissemination. D) publish personnel guidelines for pre-dissemination.

D is correct, I see all but 2. Standard IV(B2), Portfolio Investment Recommendations and Actions. can someone explain, haven’t really come across this…

2nd one is definitly A

I’m going with A for question 18

A for the second one. Dont need board approval for all recommended changes…

Question: 12 - 29599 Charmaine Townsend, CFA, has been managing a growth portfolio for her clients using a screening process that identifies companies that have high growth rates. Townsend has decided that, because of a volatile economy, she is going to adopt a value strategy using a screening process that identifies companies that have low price-earnings multiples. Townsend will violate the Code and Standards if she makes this change in her investment process without: A) notifying her clients before she makes the change. B) promptly notifying her clients after she makes the change. C) getting written permission from her clients in advance of the change. D) getting prompt written acknowledgment of the change from her clients within a reasonable time after the change was made.

there is a conflict of interest issue in the first question. Conflict of interest means 1 to 4 are all potentially violated.

A for seoncd one

C for 12

  1. B Standard IV(B2) requires prompt disclosure of any change that might significantly affect the manager’s investment processes. The disclosure need not be in writing and is not required to be made in advance.

Is it 4 or 5 ( Communication with clients)

Is it 4 or 5 ( Communication with clients) referring to ? Also what is the deal with the carve-out returns cannot be included in a single asset class composite. There is an exception if the carve-outs are managed separately and maintain their own separate cash balance. 1. Does someone understand what they mean 2. Anyone come across questions with carve-outs?

There was an interesting question that I wanted to review for ethics. It was something along the lines that a portfolio manager worked for one company and then began working for another and he included the previous results under the previous employer with the new results. You guys remember what the rule was on that?

If in the line of his work developed proprietary materials, models, those are the property of his former employer and he has no right to use such information, unless he gets a license (even if it was his work). I got these question in some test, the guy worked in one place, started his company, and after a while discovered on his computer at home some files from his former job, and decided to use it in his new company. WRONG!:slight_smile:

Did you guys see that one Q about the guy who takes clients out for dinner, gets drunk, drops a client off, and then gets charged with a DUI … but its not an ethics violation because it was after work? Isn’t he endangering the life of a client by driving him around while drunk? What if he had killed half is clients in a DUI accident while trying to drop them off?