第1題Professionalstandardsofpractice:Aareapersonalviewofacceptablebehavior.Bencompasscurrent“bestpractices.”Cspecifyaminimumlevelofacceptableconduct.第2題Aprofessionalcodeofconduct:Acanincreasepublictrustintheprofession.Bguaranteesthatmemberswilladheretoaminimumlevelofethicalconduct.Cincludesstandardsthatprovideguidanceforspecificbehaviors.第3題Situationalfactorsthatinfluenceethicalbehaviorareleastlikelytoinclude:Asocialpressure.Blargefinancialrewards.Calackofethicalprinciples.第4題Comparedtocomplyingwithlawsandregulations,complyingwithacodeofethics:Aisconsideredalowerstandard.Bofteninvolvesmorejudgment.Cincludescompliancewithalllawsandregulations.第5題Employingaframeworkfordecision-makingthatincludestheethicalaspectsofthedecisionismostlikelyto:Aleadtohigherprofits.Bavoidanyunintendedethicalconsequencesofdecisions.Cbalancetheinterestsofvariousstakeholders.第1題Insituationswherethelawsofamemberorcandidate’scountryofresidence,thelocallawsofregionswherethememberorcandidatedoesbusiness,andtheCodeandStandardsspecifydifferentrequirements,thememberorcandidatemustabideby:AlocallawortheCodeandStandards,whicheverisstricter.BtheCodeandStandardsorhiscountry’slaws,whicheverarestricter.Cthestrictestoflocallaw,hiscountry’slaws,ortheCodeandStandards.第2題AccordingtotheStandardonindependenceandobjectivity,membersandcandidates:Amayacceptgiftsorbonusesfromclients.Bmaynotacceptcompensationfromanissuerofsecuritiesinreturnforproducingresearchonthosesecurities.Cshouldconsidercreditratingsissuedbyrecognizedagenciestobeobjectivemeasuresofcreditquality.第3題BillCooperfindsatableofhistoricalbondyieldsonthewebsiteoftheU.S.Treasurythatsupportstheworkhehasdoneinhisanalysisandincludesthetableaspartofhisreportwithoutcitingthesource.HasCooperviolatedtheCodeandStandards?AYes,becausehedidnotcitethesourceofthetable.BYes,becausehedidnotverifytheaccuracyoftheinformation.CNo,becausethetableisfromarecognizedsourceoffinancialorstatisticaldata.第4題WhichofthefollowingstatementsabouttheStandardonmisconductismostaccurate？AMisconductappliesonlytoamemberorcandidate’sprofessionalactivities.BNeglectingtoperformduediligencewhenrequiredisanexampleofmisconduct.CAmemberorcandidatecommitsmisconductbyengaginginanyillegalactivity.第5題EdIngus,CFA,visitstheheadquartersandmainplantofBullittCompanyandobservesthatinventoriesofunsoldgoodsappearunusuallylarge.FromtheCFO,helearnsthatarecentincreaseinreturneditemsmayresultinearningsforthecurrentquarterthatarebelowanalysts’estimates.Basedonhisvisit,InguschangeshisrecommendationonBullittto“Sell.”HasIngusviolatedtheStandardconcerningmaterialnonpublicinformation?AYes.BNo,becausetheinformationheusedisnotmaterial.CNo,becausehisactionsareconsistentwiththemosaictheory.第6題GreenBrothers,anemergingmarketfundmanager,hastwoofitssubsidiariessimultaneouslybuyandsellemergingmarketstocks.Initsmarketingliterature,GreenBrotherscitestheoverallemergingmarketvolumeasevidenceofthemarket’sliquidity.Asaresultofitsactions,moreinvestorsparticipateintheemergingmarketsfund.GreenBrothersmostlikely:AdidnotviolatetheCodeandStandards.BviolatedtheStandardregardingmarketmanipulation.CviolatedtheStandardregardingperformancepresentation.第7題Cobb,Inc.,hashiredJudeKasten,CFA,tomanageitspensionfund.Theclient(s)towhomKastenowesadutyofloyaltyare:ACobb’smanagement.BtheshareholdersofCobb,Inc.Cthebeneficiariesofthepensionfund.第8題WhichofthefollowingactionsismostlikelyaviolationoftheStandardonfairdealing?AAportfoliomanagerallocatesIPOsharestoallclientaccounts,includingherbrother’sfee-basedretirementaccount.BAninvestmentfirmroutinelybeginstradingforitsownaccountimmediatelyafterannouncingrecommendationchangestoclients.CAfterreleasingageneralrecommendationtoallclients,ananalystcallsthefirm’slargestinstitutionalclientstodiscusstherecommendationinmoredetail.第9題TheStandardregardingsuitabilitymostlikelyrequiresthat:Aanadvisormustanalyzeaninvestment’ssuitabilityfortheclientpriortorecommendingoractingontheinvestment.Bamemberorcandidatemustdeclinetocarryoutanunsolicitedtransactionthatshebelievesisunsuitablefortheclient.Cwhenmanagingafundtoanindex,amanagerwhoisevaluatingpotentialinvestmentsmustconsidertheirsuitabilityforthefund’sshareholders.第10題WhichofthefollowingismostlikelyarecommendedprocedureforcomplyingwiththeStandardonperformancepresentation?AExcludeterminatedaccountsfrompastperformancehistory.BPresenttheperformanceofarepresentativeaccounttoshowhowacompositehasperformed.CConsidertheleveloffinancialknowledgeoftheaudiencetowhomtheperformanceispresented.第11題TheCFAInstituteProfessionalConductProgram(PCP)hasbegunaninvestigationintoChrisJones,aLevelIICFAcandidate,andanumberofhisCFAcharterholdercolleagues.JoneshasaccesstoconfidentialclientrecordsthatcouldbeusefulinclearinghisnameandwishestosharethisinformationwiththePCP.WhichofthefollowingmostaccuratelydescribesJones’sdutieswithregardtopreservationofconfidentiality?

ASharingtheconfidentialinformationwiththePCPwouldviolatetheStandards.BTheStandardsencourage,butdonotrequire,thatJonessupportthePCPinvestigationintohiscolleagues.CJonesmayshareconfidentialinformationaboutformerclientswiththePCPbutmaynotshareconfidentialinformationaboutcurrentclients.第12題Inthecaseofacomplaintaboutamember’sprofessionalconduct,CFAInstituteProfessionalConductProgramstaffareleastlikelyto:Areviewdocumentsandrecordsrelatedtothecomplaint.Brequestaninterviewwiththememberorwiththepartymakingthecomplaint.Csuspendthemember’srighttousetheCFAdesignationwhileaninvestigationisinprogress.第13題WhichofthefollowingrequirementsformembersandcandidatesisoneofthesixcomponentsoftheCodeofEthics?AMaintainandimprovetheirprofessionalcompetence.BDonotactorcauseotherstoactonmaterialnonpublicinformation.CDistinguishbetweenfactandopinionwhenpresentinginvestmentanalysis.第14題Ifamemberorcandidateisofferedanadditionalcompensationarrangementbyaclient,whichofthesevenStandardsofProfessionalConductstatestherequirementsthememberorcandidatemustfollow?ADutiestoClients.BConflictsofInterest.CDutiestoEmployers.第15題ConnieFletcher,CFA,worksforasmallmoneymanagementfirmthatspecializesinpensionaccounts.Recently,afriendaskedhertoactasanunpaidvolunteermanagerforthecity’sstreetsweeppensionfund.Aspartoftheposition,thecitywouldgrantFletcherafreeparkingspaceinfrontofherdowntownoffice.BeforeFletcheraccepts,sheshouldmostappropriately:Adonothingbecausethisisavolunteerposition.Binformhercurrentclientsinwritinganddiscusstheofferwithheremployer.Cdisclosethedetailsofthevolunteerpositiontoheremployerandobtainwrittenpermissionfromheremployer.第16題SarahJohnson,aportfoliomanager,isofferedabonusdirectlybyaclientifJohnsonmeetscertainperformancegoals.TocomplywiththeStandardthatgovernsadditionalcompensationarrangements,Johnsonshould:Adeclinetoacceptabonusoutsideofhercompensationfromheremployer.Bdisclosethisarrangementtoheremployerinwritingandobtainheremployer’spermission.Cdisclosethisarrangementtoheremployeronlyifsheactuallymeetstheperformancegoalsandreceivesthebonus.第17題Amemberorcandidatewhohassupervisoryresponsibility:Ashouldplaceparticularemphasisonenforcinginvestment-relatedcompliancepolicies.BisresponsibleforinstructingthosetowhomhehasdelegatedauthorityaboutmethodstodetectandpreventviolationsofthelawandtheCodeandStandards.ChascompliedwiththeStandardsifshereportsemployeeviolationstouppermanagementandprovidesawrittenwarningtotheemployeetoceasesuchactivities.第18題ClaireMarlin,CFA,managesaninvestmentfundspecializinginforeigncurrencytrading.Marlinwritesareporttoinvestorsthatdescribesthebasiccharacteristicsofherstrategy,whichisbasedonanexpectedappreciationoftheeurorelativetoothermajorcurrencies.Marlinshowstheprojectedreturnsfromthestrategyiftheeuroappreciateslessthan5%,between5%and10%,ormorethan10%,whileclearlystatingthattheseforecastsareheropinion.HasMarlinviolatedtheStandardrelatedtocommunicationwithclients?AYes,becauseshedidnotincludeascenarioinwhichtheeurodepreciates.BNo,becauseshedisclosedthebasiccharacteristicsoftheinvestment.CNo,becauseshedistinguishedfactfromopinionanddiscussedhowthestrategymayperformunderarangeofscenarios.第19題Ifregulationsdonotspecifyhowlongtoretainthedocumentsthatsupportananalyst’sconclusions,theCodeandStandardsrecommendaperiodofatleast:A5years.B7years.C10years.第20題DanielLyons,CFA,isananalystwhocoversseveralstocksincludingHorizonCompany.Lyons’sauntowns30,000sharesofHorizon.SheinformsLyonsthatshehascreatedatrustinhisnameintowhichshehasplaced2,000sharesofHorizon.ThetrustisstructuredsothatLyonswillnotbeabletosellthesharesuntilhisauntdies,butmayvotetheshares.LyonsisduetoupdatehisresearchcoverageofHorizonnextweek.Lyonsshouldmostappropriately:Aupdatethereportasusualbecauseheisnotabeneficialownerofthestock.BadvisehissuperiorsthatheisnolongerabletoissueresearchrecommendationsonHorizon.Cdisclosethesituationtohisemployerand,ifthenaskedtoprepareareport,alsodisclosehisbeneficialownershipofthesharesinhisreport.第21題KateWilson,CFA,isanequityanalyst.Wilsonenterstwotransactionsforherpersonalaccount.Wilsonsells500sharesofTibon,Inc.,astockonwhichherfirmcurrentlyhasa“Buy”recommendation.Wilsonbuys200sharesofHayfieldCo.andthefollowingdayissuesaresearchreportonHayfieldwitha“Buy”recommendation.HasWilsonviolatedtheCodeandStandards?ANo.BYes,bothofheractionsviolatetheCodeandStandards.CYes,butonlyoneofheractionsviolatestheCodeandStandards.第22題HernInvestmentsprovidesmonthlyemergingmarketresearchtoBakerBrokerageinexchangeforprospectiveclientreferralsandEuropeanequityresearchfromBaker.ClientsandprospectsofHernarenotmadeawareoftheagreement,butclientsunanimouslyraveaboutthehighqualityoftheresearchprovidedbyBaker.Asaresultoftheresearch,manyclientswithnondiscretionaryaccountshaveearnedsubstantialreturnsontheirportfolios.ManagersatHernhavealsousedtheresearchtoearnoutstandingreturnsforthefirm’sdiscretionaryaccounts.Hernhasmostlikely:AnotviolatedtheCodeandStandards.BviolatedtheCodeandStandardsbyusingthird-partyresearchindiscretionaryaccounts.CviolatedtheCodeandStandardsbyfailingtodisclosethereferralagreementwithBaker.第23題AfterwritingtheLevelICFAexam,CynthiaWhitegoestointernetdiscussionsiteCFAHaventoexpressherfrustration.Whitewrites,“CFAInstituteisnotdoingacompetentjobofevaluatingcandidatesbecausenoneofthequestionsintheJuneexamtouchedonAlternativeInvestments.”WhitemostlikelyviolatedtheStandardrelatedtoconductasacandidateintheCFAprogramby:ApubliclydisputingCFAInstitutepoliciesandprocedures.BdisclosingsubjectmattercoveredornotcoveredonaCFAexam.CparticipatinginaninternetforumthatisdirectedtowardCFAProgramparticipants.第24題AfterpassingallthreelevelsoftheCFAexamsonherfirstattemptsandbeingawardedherCFAcharter,PaulaOsgoodispromotinghernewmoneymanagementfirmbyissuinganadvertisement.WhichofthesestatementswouldmostlikelyviolatetheStandardrelatedtouseoftheCFAdesignation?A“ToearntherighttousetheCFAdesignation,Paulapassedthreeexamscoveringethics,financialstatementanalysis,assetvaluation,andportfoliomanagement.”B“Paulapassedthree6-hourexamsonherfirstattemptsandisamemberofherlocalinvestmentanalystsociety.”C“Becauseofherextensivetraining,PaulawillbeabletoachievebetterinvestmentresultsthanmanagerswhohavenotbeenawardedtheCFAdesignation.”Quiz3第1題WhichofthefollowingstatementsmostaccuratelydescribesthepartiesthatGIPSareintendedtoapplytoandserve?AGIPSapplytoconsultantswhoservetheirexistingandprospectiveclients.BGIPSapplytofirmsthatissuesecuritiesandserveinvestmentmanagementfirms.CGIPSapplytoinvestmentmanagementfirmsandservetheirexistingandprospectiveclients.第2題ForacompositetobeconstructedincompliancewithGIPS,theportfoliosincludedinthecompositemust:Ahavebeenmanagedbythefirmforthefullperformance-reportingperiod.Bbeselectedimmediatelyafterthelastbusinessdayoftheperiodforwhichthecomposite’sperformancewillbepresented.Cincludeallfee-paying,discretionaryportfoliosthataremanagedaccordingtothesamestrategy,mandate,orinvestmentobjective.第3題VerificationofcompliancewithGIPS:Amaybeperformedonsinglecomposites.BisrequiredforafirmtoclaimGIPScompliance.CRequirestheverificationreporttobeissuedfortheentirefirm.Quiz4第1題Maaloufworksinabranchofficeforalargewealthmanagementfirm.Thefirm’sfeesarebasedonapercentageofthevalueoftheassetsmanagedineachclientaccount.Thefirmhasastandardmethodforvaluingassetsandcalculatingfeesforallofitsclients,whichisdisclosedtoeachclientattheoutset(start)oftherelationship.Overtime,thefirmtransitionsto

usingthemarketvalueofclientassetsattheendofthebillingcycleinsteadoftheaveragedailybalanceoftheaccount;

includingassetsinthefeecalculation,suchascashorcashequivalents,thatwerepreviouslyexcluded;

chargingclientsforafullbillingperiodratherthanproratingfeesforclientsthatstartorterminateaccountsmidbillingperiod.

Maalouf

Acannotuseend-of-cyclevaluations,includecashequivalents,orchargefullfeesforafullbillingcycleforpartialcycleaccounts.

Bcanchangethevaluationandfeecalculationmethodologyaslongasactualfeeschargedtoclientsarelower.

Cmustnotifyclientsofthechangesinthevaluationandfeecalculationmethods.

Dcannotchangefundamentalelementsoftheclientrelationship,suchasvaluationandfeecalculationmethodology,onceitisdisclosedtotheclient.

第2題Corralesmanagesahedgefundthatseeksoutinvestmentopportunitiesindevelopingmarkets.Usingassetsofthefund’sinvestors,thefundhireslocalcompaniestoserveas“sub-advisers”toexploreandobtainpromisinginvestmentopportunitiesandnavigatelocallawsandregulation.Thesub-advisersoftenhaveverylimitedexperienceasfinancialconsultantsoradvisersbutdohavecloserelationshipsandconnectionswithlocalhigh-rankinggovernmentofficials.

ThepaymentsmadebyCorrales,throughthesub-advisers,oftencoversubstantial“dealfees”andotherexpensesthatfacilitategovernmentalsupportofeachinvestment.Corralesdoesnotrequirethelocalbusinesspartnerstoprovidedetailsoftheiractivitiesorwhatspecificexpensesarecoveredbythefees.Corralesreportstheseexpenditurestofundinvestorsasoperatingexpensesnecessarytothesuccessoftheinvestment.Overseveralyears,thehedgefundisverysuccessfulproducingan18%annualrateofreturnforitsinvestors.

DidCorralesactionsviolatetheCFAInstituteCodeofEthicsandStandardsofProfessionalConduct?

AYes.

BNobecauseitisacceptabletohiresub-advisersandbusinessconsultantstoassistinprocuringinvestmentopportunitiesandmanagingspecializedassets.

CNobecausethepaymentstothesub-advisersrepresentlegitimateexpensestoensurethesuccessofinvestmentsandprotecttheinterestofinvestors.DNo,aslongasthesub-advisersprovidemoredetailaboutthenatureandpurposeofthepaymentsandthisinformationisdisclosedtothehedgefundinvestors.

第3題Braunandhisfirmarehiredbyaregionalgovernmenttoserveasitsfinancialadviserforissuinggeneralobligationbonds.Themunicipalityconductsseveralbondofferingsoveranumberofyearsforconstructinganumberofmunicipalfacilities,includingamaximumsecuritydetentionfacilityandtwoschoolbuildings.Inconnectionwiththebondissues,BraunmakesanumberoftripstoNewYorkCitytomeetwithratingsagenciesinconnectionwiththeseofferings.ThetripsaretypicallyplannedforaMondayorFridaysoBrauncanobtainthecheapesttravelcosts.

Braun’swifeaccompanieshimonthetripsandtheytypicallyspendtheweekendeitherbeforeorafterthemeetingsinNewYorkCitytoenjoysportingevents,theaterperformances,andmuseums.Braunoftenmakesanumberofflightandhotelchangesafteratripisbookedtoaccommodatemeetingswithotherclients.Braunsubmitshistripexpensestohissupervisorwhodeductstripcostsshebelievesareunrelatedtothebusinesspurposeofthetripandsubmitsthebillstothemunicipalityforreimbursement.

Whichoftheexpensesbelowcanmostlikelybebilledtotheclient—forexample,thegovernmententityissuingthebonds?

ABraun’saccommodationandmealexpensesfortheweekenddaysbecausethetravelratesarecheaperoveraweekend.

BTicketstothesportingandtheaterevents,aslongastheydonotexceedanamountforreasonablebusinessentertainment.

CFlightandhotelchangefeesthatresultfromtheregularcourseofBraun’sbusinessactivities.

DThetravelandaccommodationexpensesforBraun’swifeifhedisclosestohissupervisorthatsheismakingthetripsandreceiveswrittenapprovalforhertravel.

第4題O’ReillyischieffinancialofficerofGlobalStrategicPartners(GSP),aglobalinvestmentadviserthatmergedwithHollandAdvisers,asmallerregionalinvestmentadviser.Asaresultofthemerger,GSPbecomestheadviserofrecordforseveralthousandHollandclients.Foraperiodfollowingthemerger,GSPmaintainsHolland’slegacybillingsystemfororiginalHollandclientsuntilthoseclientscanbeconvertedtoGSP’sbillingsystemandplatform.WhentheHollandbillingsystemisconverted,O’ReillyreviewstheclientbillinginformationtoensurethatitiscorrectlycopiedintotheGSPbillingsystem.

UnbeknownsttoO’Reilly,Holland’sbillingsystemhasanumberofbillinginaccuracies.Forinstance,Holland’sbillingsysteminadvertentlycausesclientadvisoryfeestodefaulttothehighestavailableaccountfeewhenclientaccountsinoneadvisoryprogramaretransferredbetweenbranches.Also,Holland’sbillingsystemchargesoutsidemanagerfeesonassetsthatareheldinmoneymarketaccountsthatdonotuseanoutsidemanager.Finally,Holland’sbillingsystemdoesnotreimburseadvance-billedfeeswhenclientsterminatetheiraccounts.Someofthesefeebillingerrorsresultedfromcodingorothersystemserrors,whereasotherswerecausedbyadministrativeerrors,includingthefailureofHollandpersonneltoimmediatelyinputnegotiatedlowerfeeratesintothebillingsystem.

AschieffinancialofficerofGSP,O’Reilly

AisnotresponsibleforinadvertentbillingsystemerrorsbyHollandbeforethemerger.

BfulfillshisresponsibilitiesbyreviewingclientbillinginformationforHollandclientstoensurethatitiscorrectlycopiedintothesystem.

C

failstomeethisethicalresponsibilitiestohisfirm’sadvisoryclients.

DactsappropriatelyaslongasheremediesHolland’sbillingerrorsoncetheclientaccountsareconvertedtoGSP’sbillingsystemandplatform.

第5題WashingtonisaseniorportfoliomanagerforValleyForgeAssetManagement,aUSregisteredinvestmentadviserandbroker/dealer.ValleyForgeprovidesadvisoryservicesonadiscretionarybasistoapproximately2,000separatelymanagedretailandinstitutionalaccounts,focusingitsinvestmentsonlarge-capitalizationstocksandfixed-incomesecurities.ValleyForgeoffersitsadvisoryclientsthreechoicesforbrokerageservices,allofwhichareoutlinedinitsinvestmentadvisorycontractwithclients:AffiliatedBrokerage,DirectedBrokerage,orDiscretionaryBrokerage.

UnderanAffiliatedBrokerage,clientscandirecttheirbrokeragetoValleyForge’sown“full-servicebrokerage.”ValleyForgedisclosesintheclientagreementthatthisarrangementcouldbeviewedasaconflictofinterest,thefirmwouldbenefitmonetarily,similarservicesbyotherbrokersmaybeofferedatlowerprices,andclientsshould“carefullyconsidertheservicesofferedrelativetothebrokeragecommissionbeingpaid.”ButWashingtoninformsclientsthattheycannegotiateacommissionrate,andthatthefirmiswillingtoprovideadiscountofatleast70%offValleyForge’s“fullcommissionrate.”Around1,200clientschooseAffiliatedBrokerage,and92%oftheseclientsreceivedthe70%discount.

TheDirectedBrokerageallowsclientstodesignateathird-partybroker/dealertohandleallaspectsofthebrokeragerelationship.Underthisoption,theclientnegotiatesthefeesand/orcommissionsdirectlywiththethird-partybroker/dealer.Ofthenearly840clientswhochoosethisoption,approximately690clientschooseBrokerB,abrokerreferredbyWashington.UndertheDiscretionaryBrokerage,clientschoosewheretheirassetswillbecustodiedanddesignatea“preferredbroker,”butValleyForgehasdiscretiontoselectthebroker/dealerforeachtradeona“bestpriceandexecutionbasis.”O(jiān)nlyabout24clientschoosethisoption.

WashingtondoesnotdisclosewhatservicesValleyForgeprovidestoitsAffiliatedBrokerageclients,andValleyForgedoesnotprovideanyservicestoitsAffiliatedBrokerageclientsthatarenotalsoprovidedtoclientswhochoosetheotherbrokerageoptions.ThebrokeragecostsundertheAffiliatedBrokerageare4.5timeshigherthanthoseundertheothertwooptions,evenwiththe70%discountonValleyForge’ssupposedretailbrokeragerate.NearlyeverytradeismoreexpensivewiththeAffiliatedBrokerageoptionbecausetheminimumcommissionpertradeismorethandoublethemaximumcommissionchargedforeachtradeundertheotheroptions.Washington’sactionsare

Aacceptablebecauseclientsarefreetochoosewhichofthethreebrokerageoptionstouse.

BacceptablebecauseWashingtonsignificantlydiscountsbrokeragefeesforclientschoosingtheAffiliatedBrokerageoption.

CacceptablebecausetheconflictsregardingtheAffiliatedBrokerageoptionarefullydisclosedintheadvisoryagreement.

Dunacceptable.

第6題Murdochisfounder,president,andheadportfoliomanagerofIOMCapitalManagement(IOM),aninvestmentadviserprovidinginvestmentadvicetofouraffiliatedhedgefundsaswellasseparateclientaccounts.IOMaccumulatesandusessoftdollarcreditsprimarilyatasinglebroker/dealerthroughequityandoptionstradingfortheIOMfundsandindividualclientaccounts.IOMdisclosesallowableusesofsoftdollarsthroughitsregulatoryfilingsandofferingmemorandaforIOMfunds.Thedisclosuresprovidethatsoftdollarsmaybeusedfor“overheadexpenses,”including“officeservices,equipment,andsupplies.”IOMrentsaportionofMurdoch’spersonalresidencetoconductitsbusiness.IOMpays6,000inrenttoacompanyMurdochowns,which,inturn,pays5,855toalocalbanktocoverthemonthlymortgagepaymentfortheproperty.Eventually,IOMandMurdochrequestthatthebrokerusesoftdollarstomaketherentalpayment.Oncethebrokerstartspayingrentusingsoftdollars,Murdochraisestherentfirstto10,000permonthandthento15,000permonth.

Murdoch’sactionsare

Aappropriatebecauserentalpaymentonofficespaceisanacceptableuseofsoftdollars.

BappropriatebecauseIOMdisclosedthatitwouldusesoftdollarsforoverheadexpenses.

CappropriatebecauseMurdochmaycharge(andincrease)rentalratesforuseofhispropertytotheextentthatthemarketwillbear.

Dinappropriate.

第7題SlateBrothersBank(SBS)servesasacustodybankforawiderangeofclients,includingmanyregisteredinvestmentcompanies.SBSoffersavarietyofservicestoitscustodyclients,includingcustody,clearing,payment,settlement,andrecord-keepingfunctions.SBSchargescustodyclientsanasset-basedfeefortheseservices.Pursuanttothebank’sclientagreement,custodyclientsalsoagreetoreimbursethebankforout-of-pocket(OOP)expensesforitemspaidbythecustodianonbehalfoftheinvestor.ThebulkoftheseexpensesarerelatedtoSocietyofWorldwideInterbankFinancialTelecommunication(SWIFT)messages,asecuredmessagingnetworkusedbybanksandotherfinancialinstitutions.

AlthoughSBSchargescustodyclientsanestablishedrateforSWIFTmessages,therateisgreaterthantheactualcostofprovidingthisservice.Mandracken,avicepresidentatSBSwhooverseesclientservices’responsibilitiesforthecustodyclients,recognizesthisdiscrepancyandbringsittotheattentionofhissupervisor.Inanemail,Mandrackenstatesthat“althoughSWIFTresidesintheOOPlanguageofmostclientfeeschedules,thefeeshavealwaysincludeanincreaseovertruecostssothattheSWIFTfeeisnotatruepass-throughtotheclientbecausewetackonamargin.”Mandracken’ssupervisordirectshimtoreducetheSWIFTratefornewcustodyclientsandtorevisittherateforexistingcustodyclientsduringcontractrenegotiations.

TobeconsistentwithhisobligationsundertheCFAInstituteCodeofEthicsandStandardsofProfessionalConduct(CodeandStandards),Mandrackenshould

Acomplywithhisdutyofloyaltytohisemployerandimplementthecorrectiveproceduresasdirectedbyhissupervisor.

Bimplementthecorrectiveproceduresasdirectedbyhissupervisorbutreportanyobjectionstothebank’sboardofdirectors.

CrefusetoparticipateinanyinteractionswithclientsutilizingthefeescheduleuntilthebankrevisestheSWIFTratechargedtoallcustodyclientstoreflectactualOOPcosts.

DreportSBS’sclientbillingpracticestothebank’sregulator.

Quiz5第1題Ahmedre