2020CFA L3 课后题_.pdf

Practice Problems 175

PRACTICE PROBLEMS

Unless otherwise stated in the question, all individuals in the following questions are

CFA Institute members or candidates in the CFA Program and, therefore, are subject

to the CFA Institute Code of Ethics and Standards of Professional Conduct.

1 Smith, a research analyst with a brokerage rm, decides to change his recom-

mendation for the common stock of Green Company, Inc., from a “buy” to

a “sell.” He mails this change in investment advice to all the rm’s clients on

Wednesday. e day after the mailing, a client calls with a buy order for 500

lates the Code and Standards?

A A client may direct a manager to use that client’s brokerage commissions to

purchase goods and services for that client.

B Client brokerage commissions should be used to benet the client and

should be commensurate with the value of the brokerage and research ser-

vices received.

C Client brokerage commissions may be directed to pay for the investment

manager’s operating expenses.

3 Jamison is a junior research analyst with Howard & Howard, a brokerage and

investment banking rm. Howard & Howard’s mergers and acquisitions depart-

B Jamison should not write the report because the two Howard & Howard

ocers serve as directors for subsidiaries of Britland.

C Jamison may write the report if she discloses the special relationships with

the company in the report.

4 Which of the following statements clearly conicts with the recommended

procedures for compliance presented in the CFA Institute Standards of Practice

Handbook?

A Firms should disclose to clients the personal investing policies and proce-

dures established for their employees.

B Prior approval must be obtained for the personal investment transactions of

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Reading 2

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Guidance for Standards I–VII176

phone call on Friday afternoon from Murdock, a prominent alumnus, request-

ing that Bronson fax him comprehensive nancial information about the fund.

According to Murdock, he has a potential contributor but needs the informa-

tion that day to close the deal and cannot contact any of the trustees. Based on

the CFA Institute Standards, Bronson should:

A Send Murdock the information because disclosure would benet the client.

B Not send Murdock the information to preserve condentiality.

C Send Murdock the information, provided Bronson promptly noties the

expectations. Upon returning to his oce, Willier releases a strong “buy” rec-

ommendation to the public. Willier:

A Violated the Standards by failing to distinguish between facts and opinions

in his recommendation.

B Violated the Standards because he did not have a reasonable and adequate

basis for his recommendation.

C Was in full compliance with the Standards.

on an additional public oering for the company. e rm’s brokerage unit now

has a “sell” recommendation on ETV, but the head of the investment banking

about the company.

C Assign a new analyst to decide if the stock deserves a higher rating.

have registered to take the Level III CFA examination. Albert’s business card

reads, “Judy Albert, CFA Level II.” Tye has not put anything about the CFA

designation on his business card, but promotional material that he designed

for the business describes the CFA requirements and indicates that Tye partic-

ipates in the CFA Program and has completed Levels I and II. According to the

Standards:

A Albert has violated the Standards, but Tye has not.

home district has told Scott that, although she is lobbying hard for the bill and

prospects for its passage are favorable, concern of the US Congress over the

federal decit could cause the tax bill to be voted down. Walkton Industries has

not made any statements about a change in dividend policy. Scott writes in his

Practice Problems 177

research report, “We expect Walkton’s stock price to rise by at least US$8.00

a share by the end of the year because the dividend will increase by US$1.50 a

share. Investors buying the stock at the current time should expect to realize a

total return of at least 15% on the stock.” According to the Standards:

A Scott violated the Standards because he used material inside information.

B Scott violated the Standards because he failed to separate opinion from fact.

C Scott violated the Standards by basing his research on uncertain predictions

of future government action.

10 Which one of the following actions will help to ensure the fair treatment of

A Informing all people in the rm in advance that a recommendation is to be

disseminated.

and comply with applicable laws.

B Can use material public information and nonmaterial nonpublic information

in the analyst’s analysis.

C Should use all available and relevant information in support of an invest-

ment recommendation.

12 Jurgen is a portfolio manager. One of her rm’s clients has told Jurgen that he

will compensate her beyond the compensation provided by her rm on the

basis of the capital appreciation of his portfolio each year. Jurgen should:

A Turn down the additional compensation because it will result in conicts

with the interests of other clients’ accounts.

recently asked Farnsworth to vote the shares in the prot- sharing plan in favor

of the slate of directors nominated by Jones Corporation and against the direc-

tors sponsored by a dissident stockholder group. Farnsworth does not want to

lose this account because he directs all the account’s trades to a brokerage rm

that provides Farnsworth with useful information about tax- free investments.

Although this information is not of value in managing the Jones Corporation

account, it does help in managing several other accounts. e brokerage rm

providing this information also oers the lowest commissions for trades and

A Violated the Standards in voting the shares in the manner requested by

Jones but not in directing trades to the brokerage rm.

Reading 2

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Guidance for Standards I–VII178

for nancial advice for years, but she has switched her account to Brown’s rm.

After spending a few minutes getting acquainted, Brown explains to Green that

she has discovered a highly undervalued stock that oers large potential gains.

She recommends that Green purchase the stock. Brown has committed a viola-

tion of the Standards. What should she have done dierently?

A Brown should have determined Green’s needs, objectives, and tolerance for

risk before making a recommendation of any type of security.

B Brown should have thoroughly explained the characteristics of the company

to Green, including the characteristics of the industry in which the company

operates.

Practice Problems 179

C A member or candidate who trades securities in a securities market where

no applicable local laws or stock exchange rules regulate the use of material

nonpublic information may take investment action based on material non-

public information.

expects to use the information he obtains there to complete his research report

on Evans stock. Ward learns that Evans plans to pay all of Ward’s expenses for