SS 01 Quiz 2 PDF

SS 01 Ethical and Professional Standards
Question #1 of 198 Question ID: 412488
Which of the following statements is most correct concerning a member's obligation to his or her employer under the Code and
Standards?
A) Consent from the employer is necessary to permit independent practice that could result in
compensation or other benefits in competition with the member's employer.
B) Members are prohibited from undertaking independent practice in competition with their employer.
C) Members are prohibited from making arrangements or preparations to go into competitive business
before terminating their relationship with their employer.
Greg Stiles, CFA, keeps a list of his clients' birthdays and has personally sent them a birthday card each year at the appropriate
time. With respect to this action, which of the following may be a violation of Standard III(E), Preservation of Confidentiality?
A) Sending a gift along with the card.
B) Hiring a company outside the firm to perform the task.

C) The mere act of sending a birthday card each year.
Susan Tigra, CFA, is a portfolio co-manager for the Sandia Energy pension fund. Sandra Bulow, a research analyst under Tigra's
supervision, creates a new trading model and immediately begins to trade. Susan stops Bulow from trading, but notes that the
firm has no guidelines for testing new models. Tigra should most likely:
A) encourage her firm to develop detailed, written guidance that establishes minimum levels of testing
for all computer-based models as recommended by Standard V(A) "Diligence and Reasonable
Basis."
B) report Bulow to the firm's compliance department for violation of Standard V(A) "Diligence and
Reasonable Basis."
C) encourage her firm to develop detailed, written guidance that establishes minimum levels of testing
for all computer-based models as required by Standard III(C) "Suitability."
Lee Hurst, CFA, is an equity research analyst who has recently left a large firm to start independent practice. He is able to
re-create several of his previous recommendation reports from memory, based on sources obtained at his previous employer. He
publishes the reports and obtains several new clients. Hurst is most likely:
A) not in violation of any Standard.

B) in violation of Standard V(A) "Diligent and Reasonable Basis."
C) in violation of Standard V(C) "Record Retention."
An investment advisor goes straight from a research seminar to a meeting with a prospective new client with whom she has
never been in contact. The advisor is very excited about the information she just received in the seminar and begins showing the
prospect the new ideas her firm is coming up with. This is most likely a violation of:
A) both of these.
B) Standard III(B), Fair Dealing.

C) Standard III(C), Suitability.
Jason Reynolds meets Jack Parker, CFA, at a social engagement and asks for some "hot stock tips." Parker declines, but sets
up an appointment to review Reynolds' risk and return objectives and financial constraints. At the conclusion of their
appointment, Parker recommends three securities he has thoroughly researched: ACK, D-Wing, and Ophus-Littbinger. Parker is
least likely:
A) in violation of Standard III(A) "Loyalty, Prudence, and Care" for failing to make a reasonable inquiry
into the client's investment experience.
B) not in violation.
C) in violation of Standard III(A) "Loyalty, Prudence, and Care" for failing to consider the three securities
in the context of the whole portfolio.
Bill Fox, CFA, has been preparing a research report on New London Wire and Cable, one of his major investment clients. He had
completed much of his analysis and had planned on having his report typed and bound today. Unfortunately, his briefcase was
stolen while he ate breakfast, and he lost all his notes and working papers. The lost materials included his notes from
management interviews, conversations with suppliers and competitors, dates of company visits, and his computer diskette
containing much of his quantitative analysis. Fox's client needs this report tomorrow. In a panic, Fox called New London's vice
president of finance and was faxed a copy of the company's most recent financial projections. Fox remembered that his own
analysis showed that management's estimates were too high. He did not remember the exact amount, so he revised New
London's figures downward 10%. Fox also incorporated some charts and graphs on New London from a research report he had
received last week from a small regional research firm and used some information from a Standard & Poor's reference work.
With the help of his secretary, a Xerox machine, and some creative word processing, Fox got the report done in time for the
evening Fedex pick up. On the way home from the office that night, Fox wondered if he had violated any CFA Institute Standards
of Professional Conduct. Fox has:
A) violated none of the Standards.

B) violated the requirement to have a reasonable basis for a recommendation and the prohibition
against plagiarism.
C) violated the requirement to have a reasonable basis for a recommendation, the prohibition against
plagiarism, and the requirement to maintain appropriate records.
Theresa Hatcher, CFA, is making arrangements to establish her own investment advisory business before terminating her
relationship with her current employer, Elite Brokers, Inc. Elite is a small company consisting of only six investment professionals
and a small support staff. According to CFA Institute Standards of Professional Conduct, which of the following activities is least
likely a violation of Hatcher's duty to Elite?
A) Hatcher solicits Elite's clients before her termination of employment at Elite.
B) Hatcher leases office space, furniture, and other equipment for her new business.
C) Hatcher engages in secret negotiations with two other investment professionals and her
administrative assistant to leave Elite in order to join her new business.
Bjorn Sandvik, CFA, completes a research report with a buy recommendation for Acorn Properties. In the early afternoon,
Sandvik e-mails this recommendation to his clients who had responded to his request that they provide Sandvik with their e-mail
addresses. Later that afternoon, the printed recommendation is forwarded to the postal service for normal delivery to all
customers, who receive the mailing 1 to 3 days later. Sandvik has:
A) violated the Code and Standards by sending the e-mail recommendation to only some of his clients.
B) violated the Code and Standards by sending the e-mail recommendation in advance of the printed
report.
C) not violated the Code and Standards because he acted fairly in disseminating research information
to his clients.
A money management firm has created a new junk-bond fund. When the firm advertised the new fund at its issuance, they used
care to accurately compute the returns from the past 10 years for all assets in the fund. The firm used the current portfolio
weights to determine an average annual historical return equal to 18% and claim an 18% annual historical return in their
advertising literature. With respect to Standard III(D), Performance Presentation, this is:
A) a violation because the advertisement implies the firm generated this return.
B) in compliance.
C) a violation because the Standard prohibits computing historical returns on risky assets like junk
bonds.
Which of the following most accurately states a limitation that the Fair Dealing standard imposes?
A) Before trading on her own portfolio, a CFA charterholder must wait for employer and client deals to
be executed.
B) Referral fees may be disclosed after proceeding with an agreement for service.
C) Clients should not be discriminated against when disseminating investment recommendations.
A financial analyst and CFA Institute member sends a preliminary research report on a company to his supervisor. The
supervisor approves the report, but then the analyst receives news that causes him to revise downward the earnings estimate of
the company. The analyst resubmits the report to the supervisor with the new earnings estimate. The analyst soon finds out that
the supervisor plans to release the first version of the report with the first earnings estimate without a reasonable and adequate
basis. In response to this the analyst must:
A) only insist that the first report be followed up by a revision.

B) both insist that a follow up report be issued and take up the issue with regulatory authorities.
C) insist that the supervisor change the earnings forecast or remove his (the analyst's) name from the
report.
Which of the following activities will least likely constitute a violation of Standard IV(A), Loyalty?
A) Consulting on your own time and obtaining written permission from your employer.
B) Contacting your current clients and asking them to "come with you" when you resign from your
current employer.
C) Conspiracy to bring about a mass resignation of other employees.
Tony Calaveccio, CFA, is the manager of the TrustCo Small Cap Venture Fund in Toronto. He places trades for the fund with
River City Brokerage. River City provides Calaveccio with soft dollars to purchase research. River City also deals in municipal
bonds, some of which Calaveccio holds in his personal portfolio. He periodically uses the soft dollars to request research reports
on various small cap stocks and also on the status of the municipal bond market and issues that he holds. These actions are:
A) in violation of his fiduciary duties regarding the municipal bond research but not so regarding the
research on the small cap issues.
B) in violation of his fiduciary duties regarding both the small cap research and the municipal bond
research.
C) not in violation of the Code and Standards.
Heidi Krueger, CFA, an investment advisor, applies soft dollars generated from client accounts to purchase a report on the
economic impact of world events, and to purchase a new conference table for the office she uses to meet with clients and
prospects. Do these purchases violate Standard III(A) Loyalty, Prudence, and Care?
A) Neither of these purchases violates the Standard.

B) Only one of these purchases violates the Standard.
C) Both of these purchases violate the Standard.
To comply with Standard IV(B), Additional Compensation Arrangements, members should do all of the following EXCEPT:
A) immediately make a written report to their employer specifying any compensation benefits they
receive.
B) state the terms of oral or written agreements regarding the compensation and the duration of the
agreement.
C) reject any outside compensation immediately because it is not appropriate to accept outside
compensation in a business setting.
Nancy Korthauer, CFA, has launched a new hedge fund called the Korthauer Tautology Fund but has had trouble hiring analysts
who are CFA charterholders as well as with finding clients. She offers a $15,000 incentive bonus to any charterholder who joins
the firm with over $1 million in committed client investments. Which of the following interpretations of the Code and Standards is
most accurate?
A) A member or candidate may arrange for current clients to switch to the Korthauer Tautology Fund
provided the member or candidate refuses to accept the incentive bonus.
B) A member or candidate may not solicit current clients away from their current employer.
C) A member or candidate may arrange for current clients to switch to the Korthauer Tautology Fund
provided clients are informed of the incentive bonus.
Bob Douglas, CFA, is considering leaving his current employer to compete in the same field. He did not sign a non-compete clause when
he was hired. He may:
A) plan and prepare to compete with his current employer, but not begin competing until his resignation is
effective.
B) may not prepare to compete, begin competing, or anything related to competing with his current employer.
C) begin competing with his current employer as long as the employer has been informed of Douglas' future
intentions.
Kim Lee manages a variety of accounts at Superior Investments. Some are permitted to invest in tax-exempt issues only; others
may not invest in a stock unless it pays dividends. Lee is researching a biotech firm specializing in the analysis of "mad cow"
disease. While touring company facilities and meeting with management, she learns that they believe they may have found a way
to reverse the disease. Moreover, one manager conjectured, "Suppose that we reversed the disease in someone who didn't even
have it? We might then be able to boost that individual's IQ into the stratosphere!" Lee returns to her office and buys shares for
all accounts under her supervision. This action is:
A) appropriate given the obvious potential of the therapy.

B) a violation of the Standard concerning appropriateness and suitability of investment actions.
C) a violation of the Standard concerning fiduciary duties.

An analyst working at an investment firm has a client that rents limousines. The client tells the analyst that as long as he is the
client's analyst, he can have free use of a limousine several times a year. The analyst needs to:
A) do nothing since the offer is not linked to the performance of the client's portfolio.
B) inform his supervisor in writing of the offer if the analyst intends to accept the offer.
C) explicitly refuse such an offer.
Greg Stiles, CFA, CAIA, is liquidating a large portion of a client's portfolio because the client is planning to buy a vacation home.
Stiles informs one of his colleagues at the firm that the client is looking for a vacation home, because the colleague's wife is a
licensed real estate broker. With respect to Standard III(E) Preservation of Confidentiality, this action:
A) Does not violate the standards because he did not disclose any details about the client's portfolio or
other financial resources.
B) does not violate the standards because he did not share the information outside the firm.
C) violates the Standard unless the client has given explicit permission to disclose his plans.
An analyst is serving on the Board of Directors of a local publicly traded company. To avoid violating the CFA Institute Code and Standards,
the analyst must disclose this to:
A) no one since it should not cause a conflict of interest for the analyst.
B) both his employer and his clients and prospective clients.
C) only his employer.
Michel Marchant, CFA, recently became an independent money manager. After six months, he has only ten clients, who are
family and friends. To supplement his income, Marchant accepted part-time employment as an advisor at Middleton Financial
Advisors. According to CFA Institute Standards of Professional Conduct, which of the following statements about Marchant's duty
to his new employer is CORRECT?
A) Marchant need not inform Middleton about his existing clients but must inform his existing clients
about his new part-time employment at Middleton.
B) Marchant must inform Middleton to keep his existing clients and must inform his existing clients of
his new part-time employment at Middleton.
C) Marchant must inform Middleton about his existing clients but need not inform his existing clients
about his new part-time employment with Middleton.
The following scenarios refer to two analysts who are employed at Global Securities, a large brokerage firm.
Paula Linstrom, CFA, is instructed by her supervisor to write a research report on Delta Enterprises. Delta's stock is widely held by
institutional and individual investors. Although Linstrom does not own any of Delta's stocks, she believes that one of her friends may
own 10 shares of Delta. The stock currently sells for $25 per share. Linstrom does not believe that informing her employer about her
friend's possible ownership of Delta shares is necessary.
Hershel Wadel, a member of CFA Institute, is asked by his supervisor to write a research report on Gamma Company. Wadel's wife
inherited 500 shares of Gamma Company from her father when he died five years ago. Gamma stock currently sells for $35 per share.
Wadel does not believe that informing his employer about his wife's ownership of Gamma shares is necessary.
According to CFA Institute Standards of Professional Conduct, which the following statements about Linstrom and Wadel's conduct is most
accurate?
A) Both of these analysts must disclose a potential conflict of interest.
B) Only one of these analysts must disclose a potential conflict of interest.
C) Neither of these analysts must disclose a potential conflict of interest.
Martin Tripp, CFA, is vice-president of the equity department at Walker Financial, a large money management firm. Of the twenty
analysts in his department for whom he has supervisory responsibility, eight are subject to CFA Institute Standards of
Professional Conduct. Tripp believes that he cannot personally evaluate the conduct of the twenty analysts on a continuing basis.
Therefore, he plans to delegate some of his supervisory duties to Sarah Green, who is subject to the Standards, and some to
Bob Brown, who is not subject to the Standards. According to CFA Institute Standards of Professional Conduct, which of the
following statements about Tripp's ability to delegate supervisory duties is most accurate?
A) Tripp may not delegate any of his supervisory duties to either Green or Brown.
B) Tripp may delegate some or all of his supervisory duties to Brown, even though Brown is not subject
to the Standards.
C) Tripp may delegate some or all of his supervisory duties only to Green because she is subject to the
Standards.

Brian Bellow, a CFA Institute member, is a portfolio manager for Progressive Trust Company. Several friends asked Bellow to
review their investment portfolios. On his own time, Bellow examined their portfolios and made several recommendations. He
received no monetary compensation from his friends for his investment advice and provided no future investment counsel to
them. According to CFA Institute Standards of Professional Conduct, did Bellow violate his duty to Progressive Trust?
A) No, because Bellow received no compensation for his services.

B) Yes, because he undertook an independent practice that could result in compensation or other
benefit to him.
C) No, because Bellow provided no ongoing investment advice.
Which of the following is least likely a recommended procedure for supervisors and compliance officers to comply with Standard
IV(C) Responsibilities of Supervisors?
A) Incorporate a professional conduct evaluation into the employee's performance review.

B) Disseminate the firm's compliance procedures to employees.
C) Hold hearings when violations have occurred to determine the severity of the violations.
Alan Cramer, CFA, practices in a country that does not regulate the investment of company retirement plans. He was retained by
Bingham Companies to manage their corporate pension plan. Bingham's management has approached Cramer and requested
that Cramer invest the entire plan in Bingham stock.
Cramer may:
A) invest all of the retirement plan assets in Bingham Company stock according to management's
request only if Cramer can document that the investment is more prudent than any other investment
opportunity he finds.
B) not invest any of Bingham Company's retirement plan in its own stock regardless of the stock's
prospects and in spite of management's request.
C) invest a portion of the retirement plan in Bingham Company stock if the investment is prudent and if
he keeps the overall portfolio properly diversified.
A candidate or member is least likely violating the Standard regarding the confidentiality of client information if he shares
confidential client information, when not required by law, with:
A) the client's attorney.
B) the co-owner of the client's account.
C) the CFA Institute Professional Conduct Program.
Vijay Gill, CFA, leases office space from Land Bank in exchange for an agreement that Gill will pay Land 20% of any fees paid by
Land customers to Gill for investment management services. Gill also has an arrangement with Bloom Insurance Advisors
whereby Gill receives a fee for each client referred. Gill only refers clients that request insurance products. Gill meets with
Randolph Song, a Land Bank customer, who is interested in Gill's asset management services as well as insurance products. Gill
is required to disclose to Song:
A) neither the Land Bank nor Bloom arrangements, but may disclose them if he chooses to do so.
B) the terms of the arrangement with Bloom, but not the terms of the arrangement with Land Bank.
C) the terms of the arrangements with both Land Bank and Bloom.
Which of the following would be a violation of Standard III(B), Fair Dealing?
A) Limiting the number of employees privy to recommendations and changes.

B) Having well defined guidelines for pre-dissemination.
C) Trading for regular accounts before discretionary accounts.
Which of the following statements is least accurate with regard to the Standard concerning loyalty to employers?
A) Skills and experience a former employee obtained through work at a firm are considered privileged
information of that firm.
B) Former employees may contact clients of their previous firms if doing so does not violate a
non-compete agreement and the contact information is obtained from public sources.
C) Employees planning to leave an employer must not engage in activities that would conflict with their
duty to act in the employer's best interest.

Concerning Standard III(B), Fair Dealing, which of the following actions is NOT a valid procedure for compliance with the
Standard?
A) Communicate investment recommendations simultaneously within the firm and to customers, where
possible.
B) Communicate investment recommendations to all customers including those accounts for which the
securities are not eligible for purchase.
C) Limit the number of people that are involved and are privy to the fact that an investment
recommendation is going to be disseminated.
Janet Thompson, CFA, is employed as an analyst by Nationwide Securities. According to CFA Institute Standards of Professional
Conduct, which of the following statements about Thompson's duty to Nationwide is NOT correct? Thompson must refrain from:
A) engaging in any conduct that would injure Nationwide.

B) making arrangements to go into a competitive business before terminating her relationship with
Nationwide.
C) engaging in independent competitive activity that could conflict with the business of Nationwide
unless she receives written consent.
Connie Baker, CFA, is an analyst with the brokerage and investment banking firm Hill and Stevens (H&S). Baker's supervisor,
John Lewis, has asked her to write a research report on Jagged Rock Brewing. The H&S mergers and acquisitions department
has represented Jagged Rock in all of its acquisitions for the past 12 years. Both Hill and Stevens sit on Jagged Rock's board.
According to the Standards of Professional Conduct, can Baker write the report?
A) Yes, if she maintains her independence and objectivity in its preparation.

B) Yes, if she discloses the directorships and the mergers-and-acquisitions relationship.
C) No.
Mark Roberts has resigned from a local investment advisory firm and begun working at Benjamin Investments. Without getting
approval from his supervisor at Benjamin, Roberts uses a phone book to find the contact information of his old clients and asks
for their continued business. Has Roberts violated any CFA Institute Standards of Professional Conduct?
A) No.
B) Yes, because he is not allowed to solicit his former clients.
C) Yes, because he must obtain written consent from his current supervisor.
Joe James, CAIA, CPA, is a Level II CFA candidate living in Boston. In the course of his accounting practice, James often refers
clients to a local law firm specializing in estate planning. James does not violate client confidentiality and does not receive
compensation for the referral. However, the law firm often gives James tickets to the theater and major sporting events.
Which of the following statements regarding disclosure is CORRECT? James:
A) must disclose the benefits received for referring clients to the law firm.
B) need not disclose the benefits received for referring clients because the clients were developed in
the course of his accounting practice.
C) need not disclose the benefits received for referring clients because no compensation is received.
Ryan Brown, CFA, is an analyst with a large insurance company. His personal portfolio includes a significant investment in QRS
common stock that his firm does not currently follow. The director of the research department asked Brown to analyze QRS and
write a report about its investment potential. Based on CFA Institute Standards of Professional Conduct, Brown is required to:
A) disclose the ownership of the stock to his employer and in the report.
B) decline to write the report without specific approval of his supervisor.

C) sell his shares of QRS before completing the report.
A member or candidate that receives consideration from others for the recommendation of products or services, must disclose
the estimated dollar value of the consideration paid in:
A) cash only.
B) cash, soft dollars, or in kind.

C) cash or soft dollars only.

Don Wilson and Nadine Chavis, both CFA charterholders, are investment advisors at Uptown Securities. Wilson recommends that one of
his clients buy Alpha Company based on research conducted by Uptown. Chavis recommends that one of her clients sell Alpha Company
based on research conducted by another brokerage firm for general distribution. Both recommendations are consistent with each client's
investment objectives and within the context of their entire portfolios. Neither Wilson nor Chavis has reason to suspect that any information
contained in the research reports from these two sources is inaccurate or inadequately supported. According to Standard V(A) Diligence
and Reasonable Basis, do Wilson and Chavis have a reasonable basis for making their investment recommendations?
A) Neither of these advisors has a reasonable basis for their recommendations.
B) Both of these advisors have a reasonable basis for their recommendations.
C) Only one of these advisors has a reasonable basis for his or her recommendation.
An analyst with his own money management firm trades on behalf of several large pension funds. The analyst now performs all
trades through a particular brokerage firm because the brokerage provides his firm with a no-interest line of credit if paid within
60 days. The line of credit is available to all brokerage clients. The brokerage provides the analyst with personal account
privileges that he would not otherwise be eligible for. The brokerage also provides the analyst with free research reports on many
companies. Which of these benefits are violations of Standard III(A), Loyalty, Prudence, and Care?
A) The research reports.

B) The personal account privileges.
C) Neither of these.
Which of the following statements regarding employee/employer relationships is NOT correct?
A) A written contract may or may not exist between employer and employee.
B) There must be monetary compensation for an employer/employee relationship to exist.
C) An employee is someone in the service of another.
Bob Hatfield, CFA, has his own money management firm with two clients. The accounts of the two clients are equal in value. It is
Hatfield's opinion that interest rates will fall in the near future. Based upon this, Hatfield begins increasing the bond allocation of
each portfolio. In order to comply with Standard V(B), Communication with Clients and Prospective Clients, the analyst needs to:
A) inform the clients of the change and tell them it is based upon an opinion and not a fact.
B) perform both of these functions.

C) make sure that the change is identical for both clients.
An analyst finds a stock with historical returns that are not correlated with interest rate changes. The analyst writes a report for
his clients that have large allocations in fixed-income instruments and emphasizes the observed lack of correlation. He feels the
stock would be of little value to investors whose portfolios are comprised primarily of equities. The clients with allocations of fixed
income instruments are the only clients to see the report. According to Standard V(B), Communication with Clients and
Prospective Clients, the analyst has:
A) violated the Standard concerning fair dealings with all clients.

B) violated the article in the Standard concerning facts and opinions.
C) not violated the Standard.
Dixie Miller, a Level II CFA candidate, heads the research department of a large brokerage firm. The firm has many analysts,
some of whom are subject to the CFA Institute Code of Ethics and Standards of Professional Conduct. If Miller delegates some of
her supervisory duties, which statement best describes her responsibilities under the CFA Institute Code and Standards?
A) Miller's supervisory responsibilities do not apply to those subordinates who are not subject to the
CFA Institute Code and Standards.
B) CFA Institute Standards prevent Miller from delegating supervisory duties to subordinates.
C) Miller retains supervisory responsibilities for those duties delegated to her subordinates.
Which of the following statements is least accurate regarding being a part of Standard III(B), Fair Dealing?
A) Shorten the time between decision and dissemination.

B) At the same time notify clients for whom an investment is suitable of a new investment
recommendation.
C) Maintain a list of clients and their holdings.
Bill Valley has been working for Advisors, Inc., for several years, and he just joined CFA Institute. Valley routinely writes research
reports on Pharmaceutical firms. Valley has recently been asked to serve on the board of directors of an organization that
promotes the search for a cure of a certain cancer. Serving on the board is an unpaid position without any direct benefits other
than meeting new people and potential clients. To comply with Standard VI, Disclosure of Conflicts, Valley needs to:
A) only disclose the position on the board to his supervisor.

B) both disclose the position on the board to his supervisor and describe his responsibilities on the
board.
C) do nothing.
Fern Baldwin, CFA, as a representative for Fernholz Investment Management, is compensated by a base salary plus a
percentage of fees generated. In addition, she receives a quarterly performance bonus on a particular client's fee if the client's
account increases in value by more than 2 points over a benchmark index. Baldwin had a meeting with a prospect in which she
described the firm's investment approach but did not disclose her base salary, percentage fee, or bonus.
Baldwin has:
A) violated the Standards by not disclosing her performance bonus.

B) not violated the Standards because there is no conflict of interest with a potential prospect in the
employment arrangements.
C) violated the Standards by not disclosing her salary, fee percentage, and performance bonus.
Greg Stiles, CFA, may withhold from CFA Institute information about a client acquired in the regular performance of his duties:
A) only if Stiles is a relative of the client.

B) for neither of the reasons listed.
C) only if Stiles has a special confidentiality agreement with the client.
Recommended procedures to comply with the Standard concerning priority of transactions are least likely to include:
A) disclosure to clients of the firm's policies in regard to personal investing.
B) limited front-running by employees.
C) blackout periods.
An analyst likes to trade options in her own account. She does not deem any of her client accounts suitable for option trading.
When she finds a favorable options position, in accordance to Standard VI(B), Priority of Transactions, she should:
A) refrain from acting until she notifies her supervisor.
B) first tell her clients about it before acting herself.

C) act on it on her own behalf as she sees fit.
All of the following are violations of Standard III(B), Fair Dealing, EXCEPT a member:
A) places a trade for the firm account before issuing a buy recommendation.
B) places a trade for her discretionary accounts before placing a trade for her non-discretionary
accounts.
C) telephones clients in distant cities the day after a buy recommendation is mailed to all clients
because their mail service is later than the member's local clients.
To comply with the CFA Institute Standards, employees have a duty to disclose possible conflicts of interest to:
A) neither employers nor clients, but the member must use "prudent judgment."
B) only their employer.

C) both their employer and their clients.
Nicole Wise, CFA, is an analyst at Chicago Securities. She attends a meeting with management of one of the companies that she
covers. During the meeting, management expresses great optimism about the company's recent acquisition of a new business.
Wise is excited about these prospects and issues a research report that states that the company is about to achieve significant
success with the new acquisition. Wise has:
A) violated CFA Institute Standards of Professional Conduct because she did not check the accuracy of
the statements that management made.
B) violated CFA Institute Standards of Professional Conduct because she misrepresented the optimism
by turning it to certainty.
C) not violated CFA Institute Standards of Professional Conduct because she had reasonable reason to
believe that the statements in her report were true.
Which of the following statements is most correct under the Code and Standards?
A) CFA Institute members are prohibited from undertaking independent practice in competition with
their employer.
B) Members are prohibited from making arrangements or preparations to go into competitive business
before terminating their relationship with their employer.
C) Consent from the employer is necessary to permit independent practice that could result in
compensation or other benefits in competition with the member's employer.
May Frost, CFA, is an equity research analyst for a "precious metals mining" exchange traded fund which has recently started
significantly outperforming its benchmark after several years of stagnation. Upon investigating the source of the outperformance,
Frost learns that the fund has experienced severe style drift, and now has a significant proportion of its resources invested in
technology and Internet stocks. Frost reviews the fund's prospectus and learns the current sector weighting violates multiple
prospectus covenants. Frost contacts her supervisor and the fund's compliance department and is told the portfolio weighting is
not her responsibility and that she should not pursue the matter further. Frost reviews the firm's whistleblower policy, contacts
personal legal counsel, and then contacts regulatory authorities regarding the style drift and prospectus violations. Frost is most
likely:
A) not in violation of the Code and Standards.
B) in violation of Standard IV(A) "Loyalty."

C) in violation of Standard III(E) "Preservation of Confidentiality."
While it would be customary to report both five-year and ten-year performance data, Seminole Equity Partners has been in existence for
only eight years. Because of this, Kurt Dambach does not report ten-year data but reports for both five years and since the inception of the
fund. This he notes in a footnote at the bottom of the information sheet. This action is:
A) in accordance with the Code and Standards since he has indicated the basis in a footnote.
B) a violation of the Standard concerning performance presentation.
C) a violation of the Standard concerning prohibition against misrepresentation.
Edwin McNeill, CFA, is a senior trader for Grey Securities. In his monthly review of his team's activity, McNeill notices a series of
suspicious trades by one of the traders. McNeill consults his manager, who agrees that these trades are a potential violation.
McNeill informs the trader that her duties will be restricted while these trades are being investigated and refers the matter to
Grey's compliance officer for further action. McNeill has:
A) violated Standard IV(C) Responsibilities of Supervisors by failing to prevent a potential violation.
B) not violated the Standards.
C) violated Standard IV(C) Responsibilities of Supervisors by restricting the trader's duties before the
investigation is completed.
The following scenarios refer to recommendations made by two analysts.
Jean King, CFA, is a quantitative analyst at Quantlogic, Inc. King uses computer-generated screens to differentiate value and
growth stocks based on accounting numbers such as sales, cash flow, earnings, and book value. Based on her analysis of all
domestically traded stocks in the U.S. over the past year, King concludes that value stocks as a class have underperformed
growth stocks over that period. Using only this analysis, she recommends that account executives at Quantlogic sell all value
stocks from the portfolios for which they have discretionary authority to trade and replace these stocks with growth stocks.
James Capelli, CFA, is a fundamental analyst at Wheaton Capital Management, which focuses on regional stocks. His
analysis of Branson Wireless includes the investment's basic characteristics such as information about historical earnings,
ownership of assets, outstanding contracts, and other business factors. In addition to conducting both a general industry
analysis and a company financial analysis, Capelli interviews key executives at Branson. Based on his analysis, he
concludes that the company's future prospects are strong and issues a "buy" recommendation.
According to CFA Institute Standards of Professional Conduct, did King and Capelli have a reasonable and adequate basis for
making their recommendations?
A) King has a reasonable basis for his recommendation, but Capelli does not.
B) Both King and Capelli have a reasonable basis for their recommendations.
C) Capelli has a reasonable basis for his recommendation, but King does not.
Which of the following is a possible breach of fiduciary duties by a CFA Institute member who manages assets on behalf of a
client?
A) Voting all proxies of stocks the client owns.

B) Neither of these breach fiduciary duties.
C) Using directed brokerage.
An analyst notices that for most years that a given class of assets has an abnormally high rate of return, the asset class often has
an abnormally low rate of return the next year. Based upon this information, according to Standard V(A), Diligence and
Reasonable Basis, the analyst can recommend:
A) short selling assets that have had a good previous year to all clients.
B) an increased allocation of Treasury bills (T-bills) for all portfolios of assets that have increased
dramatically in the previous year.
C) neither of these choices.
According to Standard VI(A), Disclosures of Conflicts, members must disclose to their clients the member's (or their firm's)
material ownership of all of the following EXCEPT:
A) real estate holdings.
B) corporate finance relationships.
C) beneficial ownership of securities.
John Hill, CFA, has been working for Advisors, Inc., for eight years. Hill is about to start his own money management business
and has given his two-week notice of his resignation from Advisors. A few days before his resignation takes effect, on his lunch
hour, he takes out a loan from a bank on behalf of his new business and uses the money to buy some office equipment for his
new business. Since he engaged in these transactions while still an employee of Advisors, Hill violated Standard IV(A), Loyalty to
Employer, by:
A) neither of these actions.
B) engaging in a financial transaction, like taking out a loan, only.

C) both taking out the loan and purchasing the office equipment.
Wanda Kirby, CFA, recently joined Allegheny Investments as a senior analyst. Because of her extensive experience in the
investments business and knowledge of the Code and Standards, Allegheny's management asked her to assume supervisory
responsibility. Kirby reviewed Allegheny's existing compliance system and determined that it was inadequate to allow her to
clearly discharge her supervisory responsibility. According to CFA Institute Standards, Kirby should:
A) decline in writing to accept supervisory responsibility until Allegheny adopts reasonable procedures
to allow her to adequately exercise such responsibility.
B) agree to accept supervisory responsibility and to develop reasonable procedures to allow her to
adequately exercise such responsibility.
C) agree to accept supervisory responsibility provided that Allegheny adopts reasonable procedures to
allow her to adequately exercise such responsibility.
Sharon West is a CFA charterholder and trust officer for REO Trust Company. Soon after beginning work for REO, West finds that REO
has been conducting all its securities transactions through her brother who is a registered representative. West's brother charges REO
commissions that are equal to the lowest available from another broker. West's brother tells her that if she continues doing business with
him, he will give her a substantial discount on all personal transactions she conducts through him. West:
A) must inform her employer of the arrangement because she is doing business with a member of her
immediate family.
B) must inform her employer of the arrangement because it provides her with additional compensation.
C) does not need to inform her employer of the arrangement because the commissions her brother charges the
firm are the lowest possible.
A firm recently hired Hal Crane, CFA, to be a supervisor in the firm. Crane has reviewed the procedures for complying with the
Code and Standards in the company. It is Crane's belief that the procedures need revision in order to be effective. Crane must:
A) exercise his supervisory responsibilities with the greater level of diligence required by the Code and
Standards.
B) make reasonable efforts to encourage the company to adopt an adequate compliance system.
C) decline supervisory responsibilities in writing until the company adopts an adequate compliance
system.
Sue Parsons, CFA, works full-time as an investment advisor for the Malloy Group, an asset management firm. To help pay for her
children's college expenses, Parsons wants to engage in independent practice in which she would advise individual clients on
their portfolios. She would conduct these investment activities only on weekends. She is currently only in the preparation stage
and has not started independent practice yet. Which of the following statements about Standard IV(A), Loyalty to Employer, is
most accurate? Standard IV(A):
A) requires Parsons to obtain written consent from both Malloy and the persons from whom she
undertakes independent practice.
B) requires Parsons to notify Malloy in writing about her intention to undertake an independent practice.
C) does not require Parsons to notify Malloy of preparing to undertake independent practice under the
current conditions.
Abner Flome, CFA, is writing a research report on Paulsen Group, an investment advisory firm. Flome's brother-in-law holds
shares of Paulsen stock. Flome has recently interviewed for a position with Paulsen and expects a second interview. According
to the Standards, Flome's most appropriate action is to disclose in the research report:
A) his brother-in-law's holding of Paulsen stock and that he is being considered for a job at Paulsen.
B) his brother-in-law's holding of Paulsen stock.
C) that he is being considered for a job at Paulsen.
Chris Babcock, CFA, a portfolio manager for a large Texas investment firm, has been offered compensation in addition to what
her firm pays her. The offer is from one of her clients and the additional compensation will be based on her yearly performance in
excess of the market index. Babcock should:
A) turn down the offer because it represents a clear conflict between this client and Babcock's other
clients.
B) make written disclosure to her other clients before she accepts this offer.
C) make written disclosure to all parties involved before she accepts this offer.
Isaac Jones, CFA, wishes to buy Maxima common stock for some of his clients' accounts. Jones also wishes to purchase
Maxima for his personal account. In accordance with CFA Institute Standards, Jones:
A) may purchase Maxima at any time, as long as the execution price is not more favorable than the
execution price given to the clients.
B) may purchase Maxima for his personal account, but the transactions for his clients must take priority.
C) must disclose his personal account purchase, in writing and in advance, to his clients and employer.
An analyst, who is a CFA Institute member, manages a high-grade bond mutual fund. This is his only professional responsibility.
When the analyst comes across a speculative stock investment that he feels is a good investment for his personal portfolio, the
analyst:
A) is in violation of Standard IV(A), Loyalty to Employer, by spending time analyzing stocks when he
should only analyze bonds.
B) may invest in the stock because the analyst would not purchase the stock for the bond portfolio he
manages.
C) must notify his supervisor about the stock according to Standard VI(B), Priority of Transactions, to
see if it is appropriate for the portfolio that he manages.
Pamela Gee is a portfolio manager. She is planning to establish her own money management firm. She has already informed her
employer, Branford, Inc., about her plans. In her remaining time at Branford, she can:
A) solicit Branford colleagues but not Branford clients.
B) start the registration of her new company.

C) inform her current clients about her resignation and let them know how to reach her, in case any
problems arise in the future.
An analyst has been covering a particular firm for years. Recently, the analyst's uncle died and left the analyst a sizable position
in the firm's stock. The analyst needs to:
A) refuse to receive the stock in the first place.
B) disclose the ownership of the stock to his supervisor.

C) do nothing since the analyst did not purchase the stock.
Rey Sanchez, CFA, covers the specialty chemical industry for Rock Advisory Associates. Until today he has had a buy
recommendation on ChemStar, and many of the firm's customers have purchased shares based upon his recommendation. The
firm's client accounts are divided into two fundamental categories: trading and buy-and-hold accounts. The firm holds
discretionary trading authority over the trading accounts, but not the buy-and-hold accounts. Sanchez has recently come to
believe that the fundamentals are changing for the worse at ChemStar, and is preparing a sell recommendation. He calls a
meeting of the firm's portfolio managers with accounts holding ChemStar and tells them of the pending release of the sell
recommendation. On this basis, the portfolio managers sell all positions in the discretionary accounts but not in the buy-and-hold
accounts. Sanchez completes and mails the report to all clients two days later, and, shortly thereafter, many of the buy-and-hold
accounts sell their ChemStar positions. With regard to these actions, Sanchez is:
A) not in violation of the Standard on Fair Dealing; the portfolio managers are in violation of the
Standard on Fair Dealing.
B) in violation of the Standard on Fair Dealing; the portfolio managers are not in violation of the
Standard on Fair Dealing.
C) in violation of the Standard on Fair Dealing; the portfolio managers are in violation of the Standard
on Fair Dealing.
Which of the following is least likely required of fiduciaries who are responsible for pension plans?
A) Supporting the sponsor's management during proxy fights.

B) Judging investments in the context of the total portfolio.
C) Acting solely in the interest of plan participants.

Arthur Harrow, CFA, is a pharmaceuticals analyst at Dominion Asset Management. His supervisor directs him to prepare
separate research reports on Miracle Drug Company and Wonder Drug Company. Harrow serves on the board of Miracle and
owns 2000 shares of Wonder, which is currently trading at $25 per share. According to CFA Institute Standards of Professional
Conduct, which of the following actions, if any, is Harrow required to take if he writes the research reports?
A) Harrow must disclose to Dominion his ownership of shares in Wonder but not his relationship with
Miracle.
B) Harrow must disclose to Dominion his relationship with Miracle but not his ownership of shares in
Wonder.
C) Harrow must disclose to Dominion both his relationship with Miracle and his ownership of shares in
Wonder.
Dave Kline, CFA, is a personal investment advisor. After a dispute with a coworker on margin policy, he formally resigns his
position by giving suitable notice. However, he does not follow his firm's established "Transition and Exit Policies" regarding
discussion of the reason for his departure. During his final two weeks of employment, Kline routinely discusses the margin policy
dispute, stating "...anyone who would lend that much money on securities of such low quality does not belong in this business..."
Kline's statements are in direct violation of the firm's "Transition and Exit Policies," but he considers it a free-speech issue. Kline
is most likely:
A) not in violation of the Code and Standards.
B) in violation of Standard IV(A) "Loyalty" recommended procedures for failing to follow the employer's
policies and procedures related to termination policy.
C) in violation of Standard IV(A) "Loyalty" recommended procedures for failing to notify regulators of the
dangerous margin policy.
An analyst belongs to a nationally recognized charitable organization, which requires dues for membership. The analyst has
worked out a deal that he provides money management advice in lieu of paying dues. For this arrangement to comply with the
standards, the analyst needs consent from:
A) his supervisor in his regular place of work only.
B) both his supervisor in the organization and his regular place of work.
C) his supervisor in the organization only.

Standard III(E), Preservation of Confidentiality, applies to the information that an analyst learns from:
A) current clients and prospects only.
B) current clients, former clients, and prospects.
C) current clients and former clients only.
Bertrand Greene, CFA, is preparing a report on Blanding, Inc. Blanding's earnings have increased in each of the last six years by
an average of 11.8%. Based on his analysis, Greene projects that Blanding's earnings will increase by 12.5% in each of the next
two years. Greene will violate the Code and Standards if he states:
A) "Blanding's earnings have been compounding at approximately 11.8% annually."
B) "Blanding's earnings will grow at 12.5% annually in each of the next two years."
C) "I expect Blanding's earnings growth to increase to 12.5% annually in the next two years."
Grant Starks, CFA, has been working for Advisors, Inc., for eight years. Starks is about to start his own money management
business and has given his two-week notice of his resignation. A few days before his resignation takes effect, a current client of
Advisors calls him at his office to inquire about some services for her account at Advisors. During the conversation, Starks tells
the client that his new business will have lower commissions than Advisors. Starks has most likely violated:
A) Standard VI(B), Priority of Transactions.

B) Standard IV(A), Loyalty to Employer.
C) Standard V(B), Communication with Clients and Prospecitve Clients.
When an analyst makes an investment recommendation, which of the following statements must be disclosed to clients?
A) An employee of the firm holds a directorship with the recommended company.
B) Both of these statements must be disclosed to clients.

C) The firm is a market maker in the stock of the recommended company.

Which of the following statements about Standard IV(C) Responsibilities of Supervisors is least accurate?
A) If a subordinate violates a securities law, her supervisor is in violation of Standard IV(C).
B) If the supervisor makes a reasonable effort to detect violations, but fails to detect a violation that
occurs, she is in compliance with Standard IV(C).
C) If no effort is made to detect violations, the supervisor is in violation of Standard IV(C) even if no
violations by her subordinates have occurred.
The O'Douls (husband and wife) have decided to work with Jane Mack, CFA, to have her recommend an investment portfolio for
them. The O'Douls are novice investors and Mack has determined their asset allocation model falls into the conservative
category. After researching various investment options for the O'Douls, Mack has made a recommendation that they divide their
account on a 25%/75% basis between shares of a computer peripherals manufacturing company her brokerage firm is
underwriting and investment grade corporate bonds. The O'Douls are not aware that Mack's firm is underwriting an offering of the
company in question. Which CFA Institute Standard(s) has Mack violated given her actions?
A) Standard V(A), Diligence and Reasonable Basis, and I(D), Misconduct.
B) Standard III(B), Fair Dealing, and III(A), Loyalty, Prudence, and Care.
C) Standard VI(A), Disclosure of Conflicts, and III(C), Suitability.
The Standard concerning preservation of confidentiality states that members and candidates must keep information confidential
about:
A) current clients, former clients, and prospective clients.
B) members and candidates.

C) current clients, former clients, and competitors.
An independent analyst has only one client. One of the client's largest holdings is a brokerage firm. Because of the large holding
by his client, the brokerage firm recently began allowing the analyst to tap into the firm's computer network to use the firm's
research facilities. This is allowable as long as the analyst:
A) discloses the relationship to the client.
B) uses the resources to help manage the client's account.

C) does both of the actions listed here.
Which of the following statements regarding allocating trades is CORRECT? It is permissible under the Standards to allocate
trades:
A) on a pro-rata basis over all suitable accounts.
B) based upon compensation arrangements.
C) based upon any method the firm deems suitable so long as the allocation procedure has been
disclosed to all clients.
Dave Kline, CFA, is a personal investment advisor with 200 individual, family, and corporate accounts. After a dispute with a
coworker on margin policy, he formally resigns his position by giving suitable notice. However, he does not follow his firm's
established "Transition and Exit Policies" regarding his accounts. The firm's stated policies require him to notify each client of his
planned departure and personally introduce them to their new account representative, Greg Potter. Kline sees Potter as a rival
and states "...let Potter do his own work and find his own clients." Kline is most likely:
A) in violation of Standard I(D) "Misconduct" for leaving clients subject to an account representative he
does not find suitable.
B) in violation of Standard IV(A) "Loyalty" for failing to follow the employer's policies and procedures
related to notifying clients of his departure.
C) not in violation of the Code and Standards.
In securing the shares for all accounts under her management, Linda Kammel of Northwest Futures purchased three blocks of
shares at three different prices. She then allocated these shares by placing shares from the first block in accounts with surnames
beginning with A-G. The second was allocated over accounts H-P, and the third over Q-Z. This action is:
A) permissible only if the clients are informed of the allocation procedure.

B) consistent with her responsibilities under the Code and Standards.
C) not permissible under the Code and Standards.

Tony Calaveccio, CFA, is the manager of the TrustCo Small Cap Venture Fund in Toronto. Calaveccio places a trade with
Quantco Brokerage. While Calaveccio's part of the transaction was conveyed correctly to Quantco, there was a trading error
made in Calaveccio's account due to a slip up within Quantco. Calaveccio realizes that the error has taken place, and informs his
contact at Quantco. Calaveccio allows Quantco to cover the error, with no cost to TrustCo. This is:
A) a violation of Calaveccio's fiduciary duties.
B) a violation of Calaveccio's duty to his employer.

C) permissible under CFA Institute Standards.
Bill Fence, CFA, supervises a group of research analysts, none of whom have earned the CFA designation (nor are they CFA
candidates). On several occasions he has attempted to get his firm to adopt a compliance system to ensure that applicable laws
and regulations are followed. However, the firm's principals have never adopted his recommendations. Fence should most
appropriately:
A) take no further action, because by encouraging his firm to adopt a compliance system he has fulfilled
his obligations under the Code and Standards.
B) refuse supervisory responsibility.
C) report the inadequacy by submitting a complaint in writing to the CFA Institute Professional Conduct
Program.
Nancy Korthauer, CFA, has launched a new hedge fund called the Korthauer Tautology Fund and is actively soliciting clients from
competitor's firms. Client presentations are necessarily brief and often take place with the prospective client's current investment
advisor in the room. The Code and Standards require that:
A) all client presentations provide a thorough review of all elements of the investment management
process. Abbreviated presentations are forbidden.
B) member or candidate provide (on request) additional detail information which supports the
abbreviated presentation.
C) a prospective client's current investment advisor not participate in meetings.

For years John Berger, a CFA charterholder and CEO of a company, relied upon a set of reasonable procedures for preventing
violations of the Code and Standards of Professional Conduct in the firm. To comply with the Standards, Berger must:
A) only ensure the procedures are monitored and enforced.
B) do nothing more than have the set of procedures in place as stated.
C) both periodically review the procedures and ensure the procedures are monitored and enforced.
Andrew Mader, CFA, is an analyst with Metro Investment Services. During lunch with some of Metro's managers, Mader is told,
"There are going to be major problems at Gebco (a firm that Metro had brought public last year). I was just over there and the
place is just crawling with government inspectors." Mader had just issued a report with a "buy" recommendation on Gebco last
week. Mader should:
A) immediately issue a new report, but only after stopping by Gebco himself to corroborate the story.
B) not do anything to avoid a violation of fair dealing.
C) not do anything because to do so would violate his obligation to preserve confidentiality.
Carol Hull, CFA, is an investment advisor whose prospective client, Frank Peters, presents special requirements. To construct an
investment policy statement for Peters, Hull inquires about Peters' investment experience, risk and return objectives, and
financial constraints. Peters states that he has a great deal of investment experience in the capital markets and does not wish to
answer questions about his tolerance for risk or his other holdings. Under Standard III(C), Suitability, Hull:
A) is permitted to manage Peters' account without any knowledge of his risk preferences.
B) must decline to enter into an advisory relationship with Peters.

C) may accept Peters' account but may only manage his portfolio to a benchmark or index.
A money management firm has the following policy concerning new recommendations: When a new recommendation is made,
each portfolio manager estimates the likely transaction size for each of their clients. Clients are notified of the new
recommendation in the order of their estimated transaction size-largest first. All clients have signed a form where they
acknowledge and consent to this allocation procedure. With respect to Standard III(B), Fair Dealing, this is:
A) a violation of the standard.
B) not a violation because the clients have signed the consent form.
C) not a violation because the clients are aware of the policy.
Jill Marsh, CFA, works for Advisors where she manages various portfolios. Marsh's godfather is an accountant and has done
Marsh's tax returns every year as a birthday gift. Marsh's godfather has recently become a client of Advisors and asked
specifically for Marsh to manage his account. In order to comply Standard IV(B), Disclosure of Additional Compensation
Arrangements, she needs to:
A) have her godfather cease doing her taxes.

B) do neither of the actions listed here.
C) liquidate from her personal portfolio any stocks her godfather owns and verbally tell her supervisor
about the tax services.
James Bush, CFA, is meeting with an investor, George Stephan, for the first time. During their first meeting, Bush, before making
any inquiry regarding the client's circumstances, outlines several investment strategies and also describes a specific stock with
what Bush believes offers a high potential for large gains, and recommends that Stephan include this stock in his portfolio. With
regard to suitability, Bush's actions:
A) violate the Standards because Bush must determine Stephan's risk tolerance, objectives and needs
before making any investment recommendations.
B) violate the Standards because Bush must obtain information on which securities the client has
invested in previously, in order to make appropriate investment recommendations.
C) comply with the Standards.
Stephen Rangen, a broker, has three accounts consisting of unsophisticated, inexperienced individual investors with limited
means. One of these accounts is an elderly couple. The clients want to invest in safe, income-producing investments. They rely
heavily on Rangen's advice and expect him to initiate most transactions in their respective accounts. In managing their accounts,
Rangen pursues the following strategies: (1) buys U.S. treasury strips and non-dividend paying over-the-counter (OTC) stocks
recommended by his firm's research department, (2) uses margin accounts, and (3) concentrates the equity portion of their
portfolio in one or two stocks. Rangen's approach leads to extremely high turnover rates in all three accounts.
Which of the following statements about Rangen's conduct is most accurate? Rangen's conduct:
A) does not meet the requirements of the Code and Standards because his investment strategy is
inconsistent with his clients' objectives.
B) meets the requirements of the Code and Standards because his clients are aware of the risks that
he is taking in managing their accounts.
C) meets the requirements of the Code and Standards because his firm's research department
recommended the U.S. Treasury strips and non-dividend paying stocks.
Jess Green, CFA is the research director for Castle Investment, Inc., and has supervisory responsibility over eight analysts,
including three CFA charterholders. Castle has a compliance program in place. According to CFA Institute Standards of
Professional Conduct, which of the following is least likely an action that Green should take to adhere to the compliance
procedures involving responsibilities of supervisors? Green should:
A) disseminate the contents of the compliance program to the eight analysts.

B) issue periodic reminders of the procedures to all analysts under his supervision.
C) incorporate a professional conduct evaluation as part of the performance review only for the three
CFA charterholders.
An analyst writes a report and includes the forecasts of an econometric model developed by the firm's research department. The
analyst identifies the source of the forecast and includes all the relevant statistics concerning the model and his opinion of the
model's accuracy. With respect to Standard V(A), Diligence and Reasonable Basis, the analyst has:
A) violated the Standard by not testing the model himself.

B) violated the Standard by including quantitative details in a report.
C) complied with the Standard.
Ray Stone, CFA, follows the Amity Paving Company for his employer, Rubbell Securities. Which of the following scenarios is
Stone least likely to have to disclose?
A) Stone's ownership of Amity securities.
B) Rubbell's broker-dealer relationship with Amity.

C) The fact that Stone's son worked at Amity as a laborer during the summer while in school.
Roger Halpert, CFA, prepares a company research report in which he recommends a strong "buy." He has been careful to ensure that his
report complies with the CFA Institute Standard on research reports. According to CFA Institute Standards of Professional Conduct, which
of the following statements about how Halpert can communicate the report is most correct?
A) Halpert can make his report in person.
B) Halpert can make his report in person, by telephone, or by computer on the Internet.
C) Halpert can transmit his report by computer on the Internet.
Jennifer Stewart, CFA, a supervisor at an investment advisory firm, has tried unsuccessfully to convince top management of the
firm's need for a formal, comprehensive compliance program. What is Stewart's most appropriate course of action?
A) Decline in writing to accept supervisory responsibility.
B) Rely on the Code and Standards to perform her duties as a supervisor.
C) Resign from the firm if no compliance program is instituted.
Jane Talbot, CFA, is a portfolio manager at Cavalier Investments. Talbot manages the account of Wendall Wilcox. The
performance of Wilcox's portfolio has been below that of the benchmark portfolio, the S&P 500, for the past several years. In an
effort to enhance his portfolio's performance, Wilcox offers to pay Talbot $2,000 each year that his portfolio's return exceeds that
of the S&P 500. Wilcox suggests this arrangement last for the next three years. The amount that Wilcox agrees to pay Talbot is in
addition to the compensation that Talbot will receive from his employer and the standard fee that Wilcox will pay Cavalier for
managing his portfolio over the three-year period. Talbot agrees to the arrangement proposed by Wilcox and informs Cavalier in
writing of the terms of the agreement under which she will receive additional compensation. According to CFA Institute Standards
of Professional Conduct Talbot must disclose:
A) the nature and amount of compensation plus the duration of the agreement.
B) both the nature and amount of compensation only.
C) the nature of the compensation only.

Susan Plumb is the supervisor of her firm's research department. Her firm has been seeking the mandate to underwrite Wings
Industries' proposed secondary stock offering. Without mentioning that the firm is seeking the mandate, she asks Jack Dawson to
analyze Wings common stock and prepare a research report. After reasonable effort, Dawson produces a favorable report on
Wings stock. After reviewing the report, Plumb then adds a footnote describing the underwriting relationship with Wings and
disseminates the report to the firm's clients. According to CFA Institute Standards of Professional Conduct, these actions are:
A) a violation of Standard V(A), Diligence and Reasonable Basis.
B) a violation of Standard VI(A), Disclosure of Conflicts.

C) not a violation of any Standard.
In the process of recommending an investment, in order to comply with Standard V(A), Diligence and Reasonable Basis, a CFA
Institute member must:
A) do both of these.
B) have a reasonable and adequate basis for the recommendation.

C) support a recommendation with appropriate research and investigation.
All of the following are required by fiduciaries under Standard III(A), Loyalty, Prudence, and Care, EXCEPT:
A) support the sponsor's management during proxy fights.
B) place the client's interest before the employer's interest.

C) act solely in the interest of the ultimate beneficiaries.
Wes Smith, CFA, refers many of his clients to Bill Towers, CPA, for accounting services. In return, Towers performs routine
services for Smith, such as his tax returns, for no charge. Towers has just become a member of CFA Institute. With this
development, Towers must:
A) discontinue his services for Smith.

B) reveal to the prospects referred by Smith that he performs services for Smith, along with the
estimated value of those services.
C) only reveal to the prospects referred by Smith that he performs services for Smith.
May Frost, CFA, is concerned about the comments and activities of several of her coworkers and feels both ethical and legal
violations are routinely overlooked. According to the Code and Standards, a recommended first step would least likely be to:
A) contact industry regulators.

B) review the company's policies and procedures for reporting ethical violations.
C) provide her supervisor with a copy of the Code and Standards.
Lee Hurst, CFA, is an equity research analyst for a long-term investment fund. His annual bonus is linked to quarterly trading
profits. Under a new policy, the quarterly assessment period is switched to a monthly assessment period. According to the Code
and Standards, best practices dictate:
A) keeping the policy change private as a trade secret.

B) updating disclosures when the policy change is implemented.
C) requiring Hurst to obtain permission from each client prior to implementation of the new policy.
Referral fees a member must disclose to a prospective client include:
A) both fees a member receives and fees a member pays.
B) only fees a member receives for referrals.

C) only fees a member pays to others for referrals.
Which of the following examples of supervisory responsibility is consistent with the requirements of the Code and Standards?
A) A supervisor's income is partially based on the firm's overall level of trading activity.
B) A firm's compliance policies allow a portfolio manager to designate a trade to an account or portfolio
after the outcome of the trade is known.
C) A professional conduct evaluation is part of an employee's performance review.
According to CFA Institute Standards of Professional Conduct, members are least likely required to:
A) distribute a detailed research report to clients with any recommendation.

B) make diligent efforts to determine whether thrd party reseach relied on is sound.
C) analyze the investment's basic characteristics before recommending a specific investment to a broad
client group.
Will Lambert, CFA, is a financial analyst for Offshore Investments. He is preparing a purchase recommendation on Burch
Corporation. According to CFA Institute Standards of Professional Conduct, which of the following relationships with Burch is
Lambert least likely required to disclose?
A) he has a material beneficial ownership of Burch through a family trust.
B) his wife owns 2,000 shares of Burch.

C) his son-in-law was formerly employed by Burch.
John Hill, CFA, has been working for Advisors, Inc., for eight years. Hill is about to start his own money management business
and has given his two-week notice of his resignation from Advisors. A few days before his resignation takes effect, a former client
of Advisors calls Hill at his home about his new firm. The former client says that he is very happy that Hill is leaving Advisors
because now he and Hill can resume a professional relationship. The client says that he would never become a client of Advisors
again. Hill promises to call the client back after he has left Advisors. Hill does not tell his employer about the call. Hill has most
likely:
A) violated the Standard concerning loyalty to employer.
B) not violated the Standards.

C) violated the Standard concerning disclosure of conflicts.
Todd Gable, CFA, was attending a noon luncheon when he overheard two software executives talking about a common vendor,
Datagen, about how wonderful they thought the company was, and about a rumor that a major brokerage firm was preparing to
issue a strong buy recommendation on the stock. Gable returned to the office, checked a couple of online sources, and then
placed an order to purchase Datagen in all of his discretionary portfolios. The orders were filled within an hour. Three days later,
a brokerage house issued a strong buy recommendation and Datagen's share price went up 20%. Gable then proceeded to
gather data on the stock and prepared a report that he dated the day before the stock purchase.
Gable has:
A) violated the Standards by using the recommendation of another brokerage firm in his report.
B) violated the Standards by improper use of inside information.
C) violated the Standards by not having a reasonable basis for making the purchase of Datagen.
Several years ago, Hilton and Ross, a full service investment firm, managed the initial public offering of eCom, Inc. Now, eCom
wants Hilton and Ross to underwrite its secondary public offering. A senior manager at Hilton and Ross asks Brent Whitman,
CFA, one of its equity analysts, to write a favorable research report on eCom to help make the underwriting a success. Whitman
conducts a thorough analysis of eCom and concludes that the company has serious problems that do not suggest a favorable
financial outlook. Nevertheless, Whitman writes a favorable report because he is fearful of losing his job. Hilton and Ross publicly
distribute a report that only contains a buy recommendation and a brief description of the basic characteristics of eCom. Whitman
has violated:
A) Standard V(A) Diligence and Reasonable Basis only.
B) Standard I(B) Independence and Objectivity, only.
C) Both Standard I(B) Independence and Objectivity and Standard V(A) Diligence and Reasonable
Basis.
Bob Hatfield, CFA, has his own money management firm with two clients. The accounts of the two clients are equal in value. One
of the clients gets married and the assets of the new spouse and the client are combined. With the larger portfolio of the now
married client, Hatfield determines that they can assume a higher level of risk and begins a change in the policy concerning that
portfolio. Which of the following would violate Standard III(C), Suitability?
A) Assess the time horizon of the newly married client and his spouse.
B) Implement a similar policy for the other client who did not just get married.
C) Assess the return objectives of the newly married client and his spouse.
A client calls his money manager and asks the manager to liquidate a large portion of his assets under management for an
emergency. The manager warns the client of the risk of selling many assets quickly but says that he will try to get the client the
best possible price. This is a violation of:
A) none of the Standards listed here.
B) Standard III(C), Suitability.

C) Standard V(A), Diligence and Reasonable Basis.
Dwight Dawson, a CFA charterholder and portfolio manager at Ascott Investments, was recently appointed to the investments
committee at Brightwood College. He will receive no compensation from Brightwood for serving on this committee. Another
person at Ascott manages part of Brightwood's endowment. Dawson does not inform Ascott's compliance office of his
involvement with Brightwood, because he does not believe doing so is necessary.
Brenda Hamilton, a CFA candidate, also works for Ascott as an investment analyst. Procedures established at Ascott prohibit
personal trading in securities analyzed or recommended by Ascott. One of these securities is Horizon, a telecommunications
firm. Hamilton buys 10 shares of Horizon for her infant son's trust account. She believes that reporting this purchase to Ascott's
compliance officer is unnecessary because the amount of the transaction is small and is not for her own personal account.
Did Dawson or Hamilton's actions violate CFA Institute Standards of Professional Conduct?
A) Dawson: Yes, Hamilton: Yes.
B) Dawson: No, Hamilton: No.

C) Dawson: No, Hamilton: Yes.
An analyst finds a stock that has had a low beta given its historical return, but its total risk has been commensurate with its
return. When writing a research report about the stock for clients with well-diversified portfolios, according to Standard V(B),
Communication with Clients and Prospective Clients, the analyst needs to mention:
A) the relationship of the historical total risk to return only.
B) both the historical beta and total risk and return.

C) the relationship of the historical beta and return only.
According to Standard III(A) Loyalty, Prudence and Care, brokerage is an asset of the:
A) client.
B) brokerage firm conducting the trades.
C) managing firm.
Jack Salyers, CFA, is considering starting his own firm to compete with his current employer. He takes several actions before
turning in his resignation. Which of the following actions is NOT in violation of Standard IV(A), Loyalty to Employer?
A) Jack copied the employer's computer models and other property.
B) Before leaving, Jack solicits his employer's current clients.
C) Jack told his employer that he was considering leaving and requested that the employer write him a
letter of recommendation.
Dick Bowden, a CFA charterholder, receives a free country club membership in exchange for financial advice he can offer the
firm. He should:
A) disclose the arrangement to his employer.
B) reject the country club membership since it is illegal under CFA Institute rules and regulations to
accept outside compensation.
C) do nothing; it is his business where he spends his free time.
For years, John Berger, a CFA charterholder and CEO of a company, relied upon a set of reasonable procedures for preventing
violations of the Standards of Practice in the firm. The company has recently arranged to have members of CFA Institute as
mid-level supervisors throughout the firm. With this arrangement Berger has delegated the supervision of employees with respect
to the Code and Standards to the mid-level managers. With this action Berger:
A) has violated Standard IV(C), Responsibilities of Supervisors.
B) is relieved of his obligation to supervise the employees under the mid-level supervisors.
C) is still responsible for seeing that procedures are in place to prevent violations of the Code and
Standards.
Standard VI(B), Priority of Transactions, applies to transactions an analyst takes on behalf of:
A) his clients.
B) his employer.
C) both of these.
An analyst has a large personal holding of a security, and he has just determined that market conditions warrant selling this
security. The analyst contacts clients who have a position in the security and advises them to sell some or all of the security. After
waiting 24 hours, he sells the security from his personal accounts. This is:
A) a violation of Standard VI(B), Priority of Transactions.

B) a violation of Standard III(B), Fair Dealing.
C) congruent with Standard VI(B), Priority of Transactions.
An analyst receives a research report from a colleague. The colleague's report has an elaborate table with performance data on
publicly traded stocks. The colleague says the data in the table consists of measures provided by Standard & Poor's. The analyst
finds the table a useful reference for a report she is writing. She uses several pieces of data from the table. The analyst is
potentially in violation of:
A) Standard I(C), Misrepresentation, concerning the use of the work of others.
B) no particular standard because this is appropriate activity.

C) Standard V(A), Diligence and Reasonable Basis, if she does not first verify the data in the table is
accurate.
A firm produces regular proprietary research reports on various companies. According to Standard VI(B), Priority of Transactions,
which of the following would be an "access person?"
A) An independent auditor with access to material, non-public information on a company being

analyzed.
B) A person working in the mail room.

C) A supervisory analyst who reviews all research reports prior to dissemination.
Bertha Mader, CFA, received proxy material related to a hostile takeover attempt of Danube Industries by Balnet Company. She
holds shares of Danube in most of her client accounts. Mader has a high opinion of Danube's management because they have
run the company successfully and have always responded directly and honestly to her inquiries. She is not acquainted with
Balnet's management team but knows they have a reputation for improving the bottom line at the companies they acquire, partly
because they tend to replace upper management at their targets and assume their functions. Balnet's offer is 60% higher than
the price of Danube shares before the announcement. Danube's management has contacted Mader and requested that she vote
the shares she controls against the takeover because the management is concerned for their jobs and for the welfare of the
company. To comply with the Code and Standards, Mader should:
A) delegate her proxy vote to another member of her firm due to the conflict of interest created when
she was contacted by management.
B) vote for the takeover if she can get assurance that Danube's management team will remain in place.
C) vote for the takeover if it is in the best interest of Danube's shareholders, regardless of the
consequences to current management.
An analyst routinely has the opportunity to offer his clients the opportunity to purchase "hot new issues." He tells his clients that
he will distribute each issue equally among those interested, with himself included in the distribution. The clients do not object to
this. With respect to Standard VI(B), Priority of Transactions, this:
A) cannot be a violation because the clients know of the practice and agree.
B) may be a violation despite the clients' approval.
C) may be a violation because it is impossible to distribute hot new issues equally.
Standard V(B), Communication with Clients and Prospective Clients, least likely requires members to:
A) make clear buy or sell recommendations on the securities covered in research reports.
B) disclose the general principles of investment processes used to analyze and select securities, and
construct portfolios.
C) use reasonable judgment regarding the inclusion or exclusion of relevant factors in research reports.
According to Standard III(C) Suitability, which of the following is least likely to be considered a relevant factor in determining the
appropriateness and suitability of investment recommendations or actions for each portfolio or client?
A) Needs and circumstances of the portfolio or client.

B) Basic characteristics of the total portfolio.
C) Best interests of the investment professional.
Will Lambert, CFA, is a financial analyst for Offshore Investments. He is preparing a purchase recommendation on Burch
Corporation for internal use. According to the CFA Institute Standards of Professional Conduct, which of the following statements
about disclosure of conflicts is not required? Lambert would NOT need to disclose to his employer that:
A) he is a beneficiary of a pension plan of his former employer that owns a large number of shares of
Burch's stock.
B) his wife owns 2,000 shares of Burch Corporation.

C) Offshore is an OTC market maker for Burch Corporation's stock.
A manager has pointed out that his firm has experienced significant expansion over the past few years. Until recently, its Legal Department
was responsible for the firm's compliance activities. Now, however, the legal and compliance functions have been separated. A compliance
officer has been formally designated and a comprehensive compliance program has been put in place.
In order to function effectively, the compliance officer must have the authority:
A) to affect, control, and guide employee behavior and to respond to employee misconduct.
B) to hire and fire personnel.
C) which is consistent with the most senior partner or executive officer in the firm.
Mary Hiller, CFA, is a senior analyst at a mutual fund. She is also a member of the Board of the Directors of her daughter's
Skating Club. She is often asked for advice about the management of the club budget and about possible short-term
investments, but she is not paid for this advice. She does not undertake any research to answer these questions, providing
information based only on the general practices of the mutual fund at that moment. The only benefit she receives is a free
monthly membership for her daughter that would usually cost $182. What should she do before making any recommendations, in
order to comply with the CFA Institute requirements?
A) Consult only on her free time and do not accept any benefit greater than $100.
B) Obtain prior permission from her employer.
C) Inform her current clients about her outside consulting.
An analyst who is a member of CFA Institute has composed an introductory information packet for her new clients, which
includes information on fees she receives for referring clients to other professionals and those she pays for having clients
referred to her. With respect to Standard VI(C), Referral Fees, this action:
A) may not satisfy the Standard if such information is only provided after the receivers of the information
have become clients.
B) exceeds the requirement of the Standard because she does not need to reveal the fees she pays to
those that refer clients to her.
C) is not addressed in the Standard.
An analyst meets with a new client. During the meeting, the analyst sees that the new client's portfolio is heavily invested in one
over-the-counter stock. The analyst has been following the stock and thinks it will perform well in the long run. The analyst
arranges through a brokerage firm to simultaneously sell a large number of shares of the stock via a series of cross trades from
the new client's portfolio to various existing clients. He arranges the trades to be executed at a price that approximates the
current market price. This action is:
A) a violation of Standard III(B), Fair Dealing.
B) a violation of Standard III(A), Loyalty, Prudence, and Care.

C) not in violation of the Standards.
While trading on behalf of a pension account, an analyst receives special research reports from the brokerage firm with whom
she is doing the trades. Such an activity is:
A) a violation of both Standard III(A), Loyalty, Prudence, and Care, and the Code of Ethics.
B) a violation of only The Code of Ethics.

C) not in itself a violation of Standard III(A), Loyalty, Prudence, and Care, nor the Code of Ethics.
Samuel Goldstein, CFA, is an analyst for Tamarack Securities. Goldstein's father, Reuben, has a client account at Tamarack. In
ordering trades, Goldstein should place orders in:
A) all accounts simultaneously.
B) his clients' accounts first, his father's account second, and his account last.
C) his clients' and his father's accounts in the first group and his personal accounts in the second group.
Bill Valley has been working for Advisors, Inc., for several years, and he just joined CFA Institute. Valley's sister just received a
large bonus in the form of stock options in Zephyr, Inc. Valley's sister knows nothing about financial assets and offers Valley a
week at her holiday home each year in exchange for Valley monitoring Zephyr and the value of her stock options. In order to
comply with the Code and Standards, Valley needs to inform Advisors of:
A) the compensation in the form of the use of the holiday home only.
B) both the use of the holiday home and his sister's options.
C) nothing since no money is involved and it is a favor for a family member.
Francisco Perez, CFA, is an equity research analyst for a long-term investment fund. The fund is seeking new clients, so Perez
contacts old clients he knew through his former employer. Which of the following is most accurate?
A) Perez can only solicit clients after notifying his former employer.
B) Perez cannot solicit clients from a former employer.

C) Perez is not prevented from soliciting clients as long as he is working from memory and publically
available information rather than a list generated while he was still with the former employer.
Wes Smith, CFA, refers many of his clients to Bill Towers, CPA, for accounting services. In return, Towers performs routine
services for Smith, such as his tax returns, for no charge. With respect to this relationship, Smith:
A) must disclose to his clients that Towers provides services for Smith's personal benefit.
B) is in violation of both Standard V(B) and III(B).

C) is only in violation of Standard III(B), Fair Dealing, by not putting the client first.
An analyst has several groups of clients who are categorized according to their specific needs. Compared to research reports
distributed to all of the clients, reports for a specific group:
A) will definitely include more basic facts.

B) will not be allowed because it violates the Standard III(B), Fair Dealing.
C) may generally exclude more basic facts.
Nick O'Donnell, CFA, unsuspectingly joins the research team at Wickett & Co., an investment banking firm controlled by
organized crime. None of the managers at Wickett are CFA Institute members. Because of his tenuous situation at Wickett,
O'Donnell begins making preparations for independent practice. He knows he will be terminated if he informs management at
Wickett that he is preparing to leave. Consequently, he determines that "if he can just hang on for one year, he will likely have a
client base sufficient for him to strike out on his own." This action is:
A) a violation of his duty to disclose conflicts to his employer.

B) not a violation of his duty to employer.
C) a violation of his fiduciary duties.
A money manager is meeting with a prospect. She gives the client a list of stocks and says, "These are the winners I picked this
past year for my clients. Their double-digit returns indicate the type of returns I can earn for you." The list includes stocks the
manager had picked for her clients, and each stock has listed with it an accurately measured return that exceeds 10%. Is this a
violation of Standard III(D), Performance Presentation?
A) Yes, unless the positions listed constitute a complete presentation (i.e., there were no stocks omitted
that did not perform in the double digits).
B) No, because the manager had the historical information in writing.

C) Yes, because the manager cannot reveal historical returns of recent stock picks.
Ted Riczek, CFA, is an independent investment advisor. Riczek often makes investment recommendations to clients based on
research from several third-party sources. The Code and Standards most likely require Riczek to:
A) disclose to his clients the sources of any third-party research that supports his recommendations.
B) perform his own research rather than relying on third-party research.
C) make a reasonable effort to verify that the third-party research is sound.
Isabella Travelli, CFA, is a research analyst for Worldwide Investments in Rome, Italy. Travelli was contacted by Seaside
Partners of Milan, Italy, a regional brokerage firm, about doing research on companies in the beverage industry on a contract
basis. Travelli may do the contract work without violating the Standards:
A) only after receiving consent from both Worldwide and Seaside.
B) if Worldwide has no clients in the same geographic area as Seaside.

C) if Worldwide does not follow the beverage industry.
An analyst belongs to a nationally recognized charitable organization, which requires dues for membership. The analyst has
worked out a deal where he provides money management advice in lieu of paying dues. Which of the following must the analyst
do?
A) Resign from the position because the relationship is a conflict with the Standards.
B) Must treat the charitable organization as his employer.

C) Nothing since he is not an employee of the charitable organization.
An analyst who routinely purges the files that support his research and recommendations:
A) may be violating Standard V(C), Record Retention.
B) is acting in accordance to Standard IV(A), Loyalty to Employer.
C) is acting in accordance to Standard III(E), Preservation of Confidentiality.

Fernando Abrea, CFA was an analyst for Pacific Investments. In October he left Pacific and joined Global Securities as manager
of a local office. Abrea's change of employment came about in the following manner:
In April, Abrea contacted Global about a possible position he saw advertised in a financial publication and had exploratory
meetings with Global.
In July, Abrea submitted a strategic plan to Global and signed an agreement to join Global. He then contracted for office
space on behalf of Global.
On October 15, Abrea's resignation from Pacific became effective. He did not take any client lists from Pacific.
On October 16, Abrea mailed a letter that explained his new undertaking with Global to prospective clients, including his
former clients at Pacific.
With respect to Standard IV(A) Loyalty, Abrea:
A) did not violate the Standard.
B) violated the Standard by contracting for office space on behalf of Global.
C) violated the Standard by contacting his former clients at Pacific.
Paul Salyer,a portfolio manager, is making a presentation to a prospective client. Paul says that as a new portfolio manager, he
made an average annual rate of return of 50% in the last two years at his previous firm and that based on this, he can guarantee
a 50% return to the client. Which of the following statements is in accordance with Standard III(D), Performance Presentation?
A) Stating his past performance as long as it is fact.
B) Imputing his past performance to future performance.
C) Implying that he can guarantee a return.
A CFA Institute member, undertaking independent practice that could result in compensation or other benefit:
A) must notify his employer of the types of service to be rendered, the expected duration, and the
expected compensation.
B) must notify the entities for whom he plans to undertake independent practice of the compensation he
receives from his employer.
C) must notify his employer and clients of the types of service to be rendered and the expected
compensation.
Rhonda Meyer, CFA, is preparing a research report on Moon Ventures, Inc. In the course of her research she learns the
following:
Moon had its credit rating downgraded by a prominent rating agency 3 years ago due to sales pressure in the industry. The
rating was restored 3 months later when the pressure resolved.
Moon's insider trading has been substantial over the last 3 months. Holdings of Moon shares by officers, directors, and key
employees were reduced by 50% during that period.
In Meyer's detailed report making a buy recommendation for Moon, both the credit rating downgrade and the insider trading were
omitted from the report.
Meyer has:
A) violated the Code and Standards by not including the insider trading information in her report.
B) not violated the Code and Standards in her report.
C) violated the Code and Standards by not including the insider trading information and by not including
the credit rating downgrade in her report.
Peggy Green, CFA, is a research analyst following Brown Co. All the information she has gathered suggests the stock should be
rated a weak "hold." During a recent lunch, Green overheard another analyst say that the stock should be rated a "buy." Green
returns to her office and issues a "buy" recommendation. Green:
A) has violated CFA Institute Standards of Professional Conduct because she failed to distinguish
between fact and opinion.
B) violated CFA Institute Standards of Professional Conduct because she did not seek approval of the
change from her firm's compliance director.
C) has violated CFA Institute Standards of Professional Conduct because she did not have a
reasonable and adequate basis for making this recommendation.
Standard VI(C), Referral Fees, requires the member to do all of the following EXCEPT:
A) make required disclosures to the referred client before an agreement is made to provide services to
the referred client.
B) disclose to the referred client how much the referral source was paid to refer the client.
C) disclose to the referred client the percentage of the member's business that comes from referrals.
Standard VI(C), Referral Fees, is applicable to:
A) only consideration paid in soft dollars for the recommendation of products or services.
B) only cash consideration received for the recommendation of products or services.
C) all consideration received or paid for the recommendation of products or services.
Karen Jackson is a portfolio manager. Jackson is friendly with David James, president of Acme Medical, a rapidly growing
biotech company. James has provided Jackson with recommendations in the biotech industry, which she buys for her own
portfolio before buying them for her clients. For three years, Jackson has also served on Acme Medical's board of directors. She
has received options and fees as compensation.
Recently, the board of Acme Medical decided to raise capital by voting to issue shares to the public. This was attractive to board
members (including Jackson) who wanted to exercise their stock options and sell their shares to get cash. When the demand for
initial public offerings (IPO) diminished, just before Acme Medical's public offering, James asked Jackson to commit to a large
purchase of the offering for her portfolios. Jackson had previously determined that Acme Medical was a questionable investment
but agreed to reconsider at James' request. Her reevaluation confirmed the stock to be overpriced, but she nevertheless decided
to purchase Acme Medical for her clients' portfolios.
Did Jackson violate Standard III(C) Suitability concerning portfolio recommendations and actions?
A) No.
B) Yes, because she did not deal fairly with all clients.
C) Yes, because she did not consider the appropriateness and suitability of investment
recommendations or actions for each portfolio or client.
An analyst has found an investment with what appears to be a great return-to-risk ratio. The analyst double-checks the data for
accuracy, keeps careful records, and is careful to not make any misrepresentations as he simultaneously sends an e-mail to all
his clients with a "buy" recommendation. According to Standard V(A), Diligence and Reasonable Basis, the analyst has:
A) violated the Standard by communicating the recommendation via e-mail.
B) fulfilled all obligations.

C) violated the Standard if he does not verify whether the investment is appropriate for all the clients.
Which of the following statements about Standard VI(C), Referral Fees, is CORRECT?
A) Referral fees must be disclosed after proceeding with an agreement for service.
B) Referral fees must be disclosed before proceeding with an agreement for service.
C) Referral fees may be disclosed before or after proceeding with an agreement for service.
While servicing his clients' accounts, an analyst who is a CFA charterholder, determines that one client is probably involved in
illegal activities. According to Standard III(E), Preservation of Confidentiality, the analyst may NOT do which of the following?
A) Contact the appropriate governmental authorities about the determination.

B) There are no exceptions in this list.
C) Contact CFA Institute about the determination.
Paula Munson, CFA, manages a mutual fund with an objective to emphasize income over capital gains. Magic Technologies is a
growth stock that pays no dividend, but Republic's research department believes the stock will dramatically outperform the S&P
500 over the next 12 to 18 months. Based on this strong recommendation, Munson adds Magic stock to her fund's portfolio.
Munson has:
A) violated the Standards by failing to comply with her portfolio's style mandate.
B) violated the Standards by relying on research that she did not perform herself.
C) not violated the Standards and improved the diversification of the fund.
A CFA charterholder may disclose confidential information about a client when:
A) the CFA Institute Professional Conduct Program requests it.
B) the information is nonmaterial.

C) it is a necessary step in proceeding with research on client preferences.
All of the following activities might constitute a violation of Standard IV(A), Loyalty to Employer, EXCEPT:
A) solicitation of the employer's clients following termination of employment.

B) misuse of confidential information.
C) solicitation of the employer's clients prior to termination of employment.
An analyst needs to inform his supervisor in writing of which of the following?
A) A client and the analyst alternate paying for lunch at a local sandwich shop.
B) An annual bonus, sent to the analyst by a client, which varies with the performance of the client's
portfolio that the analyst manages as an employee even though no verbal or written agreement
exists about the bonus.
C) Both the lunch and the bonus mentioned in the other answers.
Wes Smith, CFA, works for Advisors, Inc. In order to remain in compliance with Standard V(A), Diligence and Reasonable Basis,
Smith may recommend a security in which of the following situations?
A) For either of the reasons listed here.

B) Smith reads a favorable review of the security in a widely read periodical.
C) Advisors' research department recommends a stock.
Nicholas Brynne, CFA, develops a trading model while working for CE Jones, an investment management firm. By working on
the model at home from his personal computer, Brynne is able to devote additional work hours. Although the trading model is
successful, Brynne losses his job in a company restructuring, and decides to start his own practice using the trading model.
Nicholas is most likely:
A) in violation of the Standards because he did not receive permission from his employer to keep or use
the files after employment ended.
B) not in violation of the Standards because the trading model was created using his home computer.
C) in violation of the Standards because he did not have permission to build the trading model using his
home computer.
Calvin Moore, CFA, has been transferred from the brokerage house of the Browning Company to the portfolio management
department. In portfolio management, Moore learns that clients are grouped into three divisions according to portfolio value,
divided as follows:
Group 1 up to $10,000
Group 2 from $10,001 to $100,000
Group 3 more than $100,000
When recommendations are announced or trades are initiated, a particular sequence is followed in communicating to these
groups. At the next monthly meeting, Moore suggests that the sequencing practice is a breach of CFA Institute Standards. One of
Moore's co-workers replies that the grouping approach helps the company in applying the Standard regarding portfolio
recommendations. He further suggests that because Browning's overall performance is more strongly affected by actions taken
on the high value portfolios, that these portfolios should take priority over the small value portfolios. What should Moore do?
Moore should:
A) do nothing since there is no breach with the Standards.

B) prepare a written report to the CEO describing the problem.
C) disassociate himself from the problem and seek legal advice.
According to the CFA Institute Standards of Professional Conduct, which of the following statements about members with
supervisory responsibility is least accurate? Members with supervisory responsibility:
A) are expected to have in-depth knowledge of the Code and Standards and to apply this knowledge in
discharging their supervisory responsibilities.
B) are relieved of their supervisory responsibility if they delegate their supervisory duties to other
members of CFA Institute.
C) must make reasonable efforts to detect violation of laws, rules, regulations, and the Code and
Standards.
Ethyl Redd recently joined Bloomington Investments as a research analyst. After spending an afternoon looking through the
research team's archives, Redd is not sure Bloomington maintains the records that support the team's analysis and
recommendations for the minimum 7-year period called for by Standard V(C), Record Retention. What is Redd's most
appropriate course of action?
A) Decline to participate in any new research until she can verify that the firm is in compliance with the
Standard.
B) Review the firm's record retention procedures with her supervisor or compliance officer to ensure
that they comply with the Standard, or suggest ways to bring them into compliance.
C) Keep her own copies of the relevant records and maintain them at home for a minimum 7-year
holding period.
In the preparation of a research report, a CFA Institute member may emphasize certain matters, touch briefly on others, and omit
some altogether:
A) under no circumstances.
B) provided that the analyst both has a reasonable basis and is unconstrained by the Mosaic theory.
C) provided that the analyst has a reasonable basis for his or her actions.
Robert Hamilton, a CFA candidate, is preparing a research report on Pets-R-Us for public distribution. Hamilton's preliminary
report contains unfavorable earnings forecasts for the next four quarters. As part of his analysis, Hamilton met with Linda
Brisson, the president of Pets-R-Us, and asked her to review the preliminary report for factual inaccuracies. Brisson revised
Hamilton's earnings forecasts so that the quarterly earnings showed an upward trend and resulted in positive earnings by the
fourth quarter. Hamilton included the revised earnings figures in his report without further review. Although the final report
included the basic characteristics of Pets-R-Us, it emphasized certain areas such as projected quarterly earnings but only briefly
touched on others. According to CFA Institute Standards of Professional Conduct on research reports, Hamilton:
A) violated the Standard because he did not thoroughly review and analyze any information provided by
Brisson.
B) violated the Standard because the report did not give similar attention to all areas but instead
emphasized quarterly earnings at the expense of other areas.
C) did not violate the Standard.
Millie Walker, CFA, established an aggressive growth portfolio for her client, Jesse Wilmer, over three years ago. Wilmer was
placed on Walker's employer's client mailing list, and received monthly account statements and the firm's newsletter, which
regularly informed clients that they should contact their account representative with any change in their personal circumstances
or investment objectives. As of January, of this year, Walker had not spoken to Wilmer nor received any correspondence from
Wilmer since the account was established. Walker has:
A) not violated the Code and Standards because there has been regular correspondence from Walker's
firm to Wilmer.
B) violated the Code and Standards because the manager has not performed an update of Wilmer's
financial situation and investment objectives.
C) not violated the Code and Standards because Wilmer has been reminded regularly about the
opportunity to inform Walker about any changes.
Jacob Allen, CFA, decides he could make more money if he started his own company. Which of the following steps would most
likely violate Standard IV(A) Loyalty?
A) Soliciting, without written permission from his current employer, the business of former clients after
he leaves his current employer.
B) Using his notes from prior research of a firm in a creating a new research report on the firm, after
leaving his current employer.
C) Renting space for his new company and interviewing several candidates for the position of manager
at the new company.
The following scenarios involve two analysts at Dupree Asset Management, a small New York-based company with about $150
million in assets under management. Dupree restricts personal trading of stocks analyzed, corporate directorships, trustee
positions, and other special relationships that could reasonably be considered a conflict of interest with their responsibilities to
their employer.
Ray Bolt, CFA, is a senior investment analyst. Bolt was recently elected to the board of trustees of his alma mater, Midwest
University, and was appointed as the chairman of the University's endowment committee. Midwest has more than $2 billion in
its endowment. Bolt must travel from New York to Chicago eight times a year to attend meetings of the board of trustees and
endowment committee. Bolt did not inform Dupree of his involvement with Midwest University.
Wanda Delvecco, a candidate in the CFA Program, is a junior investment analyst. She recently wrote a research report on
Aveco Communications and recommended the stock for Dupree's "buy" list. Delvecco bought 200 shares of Aveco stock for
her personal account 12 months before she wrote her research report. Over the past 12 months, the stock's price has been
in the $20-42 price range. Delvecco has not informed Dupree of her ownership of Aveco stock.
According to CFA Institute Standards of Professional Conduct, which the following statements about Bolt and Delvecco's actions
is CORRECT?
A) Delvecco violated the Standards, but Bolt did not.

B) Both Bolt and Delvecco violated the Standards.
C) Neither Bolt nor Delvecco violated the Standards.
Selma Brown, CFA, is a portfolio manager for Mainland Securities. Rick Wood, one of her clients and owner of Wood Fitness
Centers, offers to permit Brown and her immediate family to use the facilities at his fitness centers at no cost during 2003. To get
this benefit, Brown must achieve on Wood's portfolio at least a 2-percentage point return above the total return on the S&P's 500
index during 2002. Brown orally informs her immediate supervisor of the nature and duration of the proposed arrangement.
Arnold Turley, a CFA Institute member, is a portfolio analyst at Mainland Securities. He was just elected to the Board of Directors
for Omega Services, which pays him $1,000 plus expenses for attending each of its quarterly board meetings. Turley e-mails
Mainland's compliance officer informing her of this arrangement with Omega and receives a reply informing him that the
agreement is acceptable.
Did Brown or Turley violate CFA Institute Standards of Professional Conduct?
A) Brown: Yes, Turley: Yes.
B) Brown: Yes, Turley: No.
C) Brown: No, Turley: No.
If a CFA charterholder receives a referral fee, he must:
A) consult with the firm's compliance officer, and follow his or her instructions concerning disclosure.
B) disclose the fee to the supervisor, in written form, as an additional benefit.

C) disclose the nature of the fee arrangement to the client before entering into a formal agreement.
Calvin Doggett, CFA, has been contacted by the CFA Institute Professional Conduct Program (PCP) regarding allegations that he
has taken investment actions that were unsuitable for his clients. Doggett is questioned by PCP concerning the identity of his
clients he considered suitable for investing in a very risky start-up company that eventually went bankrupt.
Doggett will:
A) not violate the Code and Standards only if he reveals the financial condition and investment
objectives of his clients on an anonymous basis and does not reveal the names of his clients to PCP.
B) not violate the Code and Standards by revealing the names, financial condition and investment
objectives of his clients to PCP.
C) violate the Code and Standards by fully cooperating with a PCP investigation if it means revealing
confidential information.
Janet Coleman, a CFA Institute member, is an analyst at a regional brokerage firm. She is preparing a research report on Standard Power
and Light. Due to deregulation, utility companies face increased competition. During the past year, three of the five utility companies in her
region have cut their dividends by 50%, on average, to provide more internal funds for investment purposes. In a discussion with
Standard's chief executive officer, Coleman learned that Standard expects to have a record amount of capital expenditures during the next
year. Although Standard subsequently issued a press release about its capital expenditure plans, it did not make any public statements
about a change in dividend policy. Coleman reasons that the management of Standard will be under pressure to cut its dividends within the
next year to remain competitive. Coleman issues a research report in which she states:
"We expect Standard Power and Light will experience an initial decrease of $3 a share in its stock price when it cuts its dividend from $2 to
$1 a share by the second quarter. We expect that Standard will strengthen its competitive position by using more internally generated
funds to finance its investment opportunities. If investors buy the stock now at around $50 a share, their total return should be at least 20%
on the stock."
Based on CFA Institute Standards of Professional Conduct, which of the following statements about Coleman's actions is CORRECT?
A) Coleman violated the Standards because she used material inside information.
B) Coleman did not violate the Standards.
C) Coleman violated the Standards because she failed to separate opinion from fact in her research report.
Procedures for compliance with Standard III(C), Suitability, include determining all of the following with respect to a client EXCEPT:
A) liquidity needs.
B) social habits and interests.
C) return objectives.
When a CFA Institute member who is presently employed by a firm undertakes any independent practice, he must do all of the following
EXCEPT:
A) disclose the expected duration of the services to be rendered.

B) secure permission from the employer.
C) remand a percentage (to be determined by the employee and employer) of the income earned back to the
employer.
Joni Black, CFA, works for a portfolio management firm. Black is a partner of the firm and is primarily responsible for managing several
large pension plans. Black has just finished a research report in which she recommends Zeta Corporation as a "Strong Buy." Her rating is
based on solid management in a growing and expanding industry. She just handed the report to the marketing department of the firm for
immediate dissemination. Upon returning to her desk she notices a news flash by CNN reporting that management for Zeta Corporation is
retiring. Black wishes she did not recommend Zeta Corporation as a "Strong Buy," but believes the corporation is still a good investment
regardless of the management. What course of action for Black is best? Black:
A) should revise the recommendation based on this new information.
B) may send out the report as written as long as a follow up is disseminated within a reasonable amount of time
reflecting the changes in management.
C) should report the new information to her immediate supervisor so that they can determine whether or not the
marketing department should send out the report as written.
In preparing research reports, which of the following is least likely required or recommended by the Code and Standards?
A) Maintain copies of materials that were relied on in preparing the research report.
B) Send all reports to the firm's legal counsel to ensure compliance with securities laws.
C) Attribute paraphrases and summaries of material prepared by others.
Jan Hirsh, CFA, is employed as manager of a college endowment fund. The college's endowment is held by the brokerage firm Advisors,
Inc. Over the years, Hirsh has developed a solid relationship with Advisors. Because of this relationship, Advisors has given her their
Platinum level service for her personal account. Advisors ordinarily gives the Platinum level only to clients who do a minimum of $2,500 of
commission business in a year. Hirsh has never reached the $2,500 commission level and probably will never do so. According to
Standard IV(B), Additional Compensation Arrangements, Hirsh needs to:
A) inform her supervisor in writing about the Platinum account.
B) do none of the actions listed here.
C) inform her supervisor verbally about the Platinum account.

Gordon McKinney, CFA, works in the trust department of a bank. The bank's trust account holds a large block of a particular company.
McKinney learns that this company is going to buy back one million shares at a 15% premium to the market price on a first-come-first-
served basis. McKinney immediately tells his mother-in-law to tender her shares but waits until the end of the day to tender the trust's
shares. McKinney has most likely violated:
A) Standard VI(B), Priority of Transactions.
B) Standard II(A), Material Nonpublic Information.
C) Standard IV(A), Loyalty to Employer.
Jan Hirsh, CFA, is employed as manager of a college endowment fund. The college's board of directors has recently voted to consider
divesting from companies located in a country that has a poor civil rights record. Hirsh has personal investments in several firms in the
country. Hirsh needs to:
A) disclose her ownership in the stocks to both her supervisor and the board.
B) do nothing since the board has not made a decision yet.
C) disclose her ownership in the stocks to her supervisor only.
When providing outside services, a member should provide all of the following information to her current employer EXCEPT:
A) the compensation she will receive.
B) the types of services to be provided.
C) a promise to remit an agreed-upon percentage of the proceeds to the current employer.
David Saul, CFA, heads the trust department at Savage National Bank. Fairway Enterprises invites Saul to sit on its Board of Directors. In
return for his services on the Board, Fairway offers to provide Saul and his family with access to the facilities at Wilmont Country Club at no
cost. Saul will not receive any monetary compensation for his services on the Board. According to CFA Institute Standards of Professional
Conduct, which of the following actions must Saul take?
A) Saul must reject the offer to serve on the Board of Directors.

B) Saul must disclose in writing to Savage Bank the terms of the offer whether or not he accepts the offer to
serve on the Board of Directors.
C) Saul must obtain written consent from Savage Bank and Fairway Enterprises if he decides to accept the
offer to serve on the Board of Directors.
Lance Tuipulotu, CFA, is a portfolio manager for an investment advisory firm. He plans to sell 10,000 shares of Park N'Wreck, Inc. to
finance his daughter's new restaurant venture, but his firm recently upgraded the stock to "strong buy." In order to remain in compliance
with Standard VI(B) "Priority of Transactions," Tuipulotu must:
A) notify his firm of his intention to sell the shares before selling the shares.
B) not sell the shares of Park N'Wreck.
C) delay selling the shares until a firm client makes an offsetting purchase to avoid having a market impact.
Jill Marsh, CFA, works for Advisors where she manages a portfolio for a wealthy family. Marsh earns 1% of the portfolio's value each year
in the form of a commission from Advisors. The family just told her that any year the portfolio she manages earns more than a 10% return,
the family will give her the use of the family's vacation home for one week. Hirsh will comply with Standard IV(B), Additional Compensation
Arrangements, if she:
A) does nothing with respect to this.
B) delivers a typed memo to her supervisor about the vacation home the first time she uses it.
C) sends an e-mail to her supervisor about the vacation home.
Phil Trobb, CFA, is preparing a purchase recommendation on Aneas Lumber for his research firm. All of the following are potential conflicts
of interest EXCEPT:
A) Trobb's research firm has a large stake of ownership in Aneas Lumber.
B) Trobb's cousin repairs machines for Aneas.
C) Aneas hires Trobb as a consultant to analyze Aneas' financial statements.

Janet Reilly has just approached Betty Miller, CFA, about purchasing 10,000 shares of Brookshire Co., a newly incorporated real estate
development firm. Reilly is a retired schoolteacher living off the income from her late husband's life insurance policy. This investment will
represent a significant shift in her investment portfolio. Miller believes this trade is unsuitable with respect to Reilly's investment policy
statement. Consistent with the Standards, Miller should most appropriately:
A) follow her firm's procedures for obtaining Reilly's approval to carry out the unsolicited trade request.
B) discuss with Reilly whether she wishes to update her investment policy statement.
C) not accept the order, because it is not a suitable investment for Reilly.
An analyst has the opportunity to offer his clients shares in a "hot new issue." One of the analyst's clients is his brother. When the new
issue comes out, for those clients he deems it would be appropriate, he offers them an equal share. He includes his brother in that group.
With respect to Standard VI(B), Priority of Transactions, this is:
A) congruent with the Standard if his brother is not a 'covered person'.
B) congruent with the Standard even if he has a direct personal interest in his brother's account.
C) congruent with the Standard as long as he does not have a direct personal interest in his brother's account.
Andy Rock, CFA, is an analyst at Best Trade Co. The company is going to announce a sell recommendation on Biomed stock in one hour.
Rock was a member of the team who reached the decision on Biomed. Rock's wife has an account at Best Trade Co. that contains Biomed
stock. According to the Code and Standards, trading on Rock's wife's account can begin:
A) only after the recommendation is announced to the general public.
B) only after Rock, as a beneficial owner, has given an appropriate amount of time for clients and his employer
to act.
C) as soon as the information is disseminated to all clients.
A money manager, who is a member of CFA Institute, states that, "Our aggressive growth fund produced a 12% annualized return last
quarter. This illustrates the superior results our firm produces." The fund return stated by the manager is accurate. Is this a violation of
Standard III(D) Performance Presentation?
A) Yes.
B) No, because the manager has stated a fact.

C) No, because a brief summary of results is acceptable as long as more complete information is made
available.
Analysts who undertake an independent consulting practice while employed must get permission from their employer and should disclose
all of the following EXCEPT:
A) the anticipated duration of the service to be rendered.
B) the compensation or benefit to be received.
C) the clients contact information.
Lance Tuipulotu, CFA, manages investments for 400 individuals and families and often finds his resources stretched. When his largest
investors petition him to include a 5% to 7% allocation of non-investment-grade bonds in their portfolios, he decides he needs additional
help to meet the request. He considers various independent advisors to use as submanagers, but determines that the most qualified
advisors would be too expensive. Reasoning that a lower-cost provider would enable him to pass the savings along to his clients, he
chooses that provider to invest the new bond allocation. Tuipulotu has violated:
A) Standard III(C) Suitability by failing to consider the appropriateness of the non-investment-grade bonds.
B) Both Standard III(C) Suitability and Standard V(A) Diligence and Reasonable Basis.
C) Standard V(A) Diligence and Reasonable Basis by letting fee structure determine the selection of the
submanager.

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SS 01 Ethical and Professional Standards

Question #1 of 198 Question ID: 412488

Question #2 of 198 Question ID: 412453

A) Sending a gift along with the card.

B) Hiring a company outside the firm to perform the task.

Question #3 of 198 Question ID: 412528

A) not in violation of any Standard.

Question #5 of 198 Question ID: 412417

B) Standard III(B), Fair Dealing.

Question #6 of 198 Question ID: 412413

Question #7 of 198 Question ID: 412537

A) violated none of the Standards.

Question #8 of 198 Question ID: 412489

A) Hatcher solicits Elite's clients before her termination of employment at Elite.

Question #9 of 198 Question ID: 412425

Question #11 of 198 Question ID: 412424

C) Clients should not be discriminated against when disseminating investment recommendations.

Question #12 of 198 Question ID: 412542

A) only insist that the first report be followed up by a revision.

Question #13 of 198 Question ID: 412487

C) Conspiracy to bring about a mass resignation of other employees.

Question #14 of 198 Question ID: 412407

Question #15 of 198 Question ID: 412412

A) Neither of these purchases violates the Standard.

C) Both of these purchases violate the Standard.

Question #16 of 198 Question ID: 412502

Question #18 of 198 Question ID: 412486

Question #19 of 198 Question ID: 412431

A) appropriate given the obvious potential of the therapy.

C) a violation of the Standard concerning fiduciary duties.

Question #20 of 198 Question ID: 412504

C) explicitly refuse such an offer.

Question #21 of 198 Question ID: 697253

Question #22 of 198 Question ID: 412567

B) both his employer and his clients and prospective clients.

C) only his employer.

Question #23 of 198 Question ID: 412471

Question #24 of 198 Question ID: 434182

A) Both of these analysts must disclose a potential conflict of interest.

B) Only one of these analysts must disclose a potential conflict of interest.

C) Neither of these analysts must disclose a potential conflict of interest.

Question #25 of 198 Question ID: 454918

Question #26 of 198 Question ID: 436849

A) No, because Bellow received no compensation for his services.

Question #27 of 198 Question ID: 454917

A) Incorporate a professional conduct evaluation into the employee's performance review.

Question #28 of 198 Question ID: 412401

Question #29 of 198 Question ID: 697252

C) the CFA Institute Professional Conduct Program.

Question #30 of 198 Question ID: 412599

Question #31 of 198 Question ID: 412415

Which of the following would be a violation of Standard III(B), Fair Dealing?

A) Limiting the number of employees privy to recommendations and changes.

C) Trading for regular accounts before discretionary accounts.

Question #32 of 198 Question ID: 460635

Question #33 of 198 Question ID: 412422

Question #34 of 198 Question ID: 412470

A) engaging in any conduct that would injure Nationwide.

Question #35 of 198 Question ID: 485750

A) Yes, if she maintains her independence and objectivity in its preparation.

Question #36 of 198 Question ID: 485747

Question #37 of 198 Question ID: 551098