“You are a fund manager at country x, which has no security laws. While changing at the local tennis club, you overhear a director of one of the major companies of a mining company boast to a colleague about the huge deposits of gold the company just discovered shortly to be announced. Should you trade on this information? A) Yes, because to fail to do so would be to fail to act in the interest of your clients B) Yes, because to fail to do so would be to fail to act in your own interest C) No, because this information is insider information D) No, because this information would be illegal in laxitania” I thought the answer was C, because the use of all insider information was deemed a violation. However, the answer is A. The explanation is that: This information is inside, but does not relate to a tender offer, it has not been procured in any way and we owe no obligation of confidentiality. We may trade on the information, and should do so if it is in our client’s best interests. The only doubt would be if this information alone is not strong enough to form a basis of judgement but that is not an option here. Does everyone agree with the answer or is this mock exam wrong?
Uh… That is horrible. That’s purely insider information. Which mock exam is that from? That wasn’t on the CFAI mocks or I would have remembered.
Actually from 7 city mock exam. Another weird question. If you write a report based on work done by a colleague and send it out with reference to your colleague is this plagiarism? The mock says no “since you do not need to reference internal sources” I am weary of this answer… but can’t remember exactly.
i mean without reference
I don’t think you need to reference internal sources because you would probably be using a company letterhead or reference the institution you’re working for in your report… but i’m not 100% sure.
i don’t believe in a million years you’d see a test question like the one in the OP, with that answer
ok cool. I thought I was going insane.
This is why I ignore the external mock exams and focus on the CFAI exams. Too confusing!
That is by far the worst written ethics question I have seen so far. That answer does not provide justification!!!
noelle80 Wrote: ------------------------------------------------------- > This is why I ignore the external mock exams and > focus on the CFAI exams. Too confusing! especially true for ethics!