All of the following are appropriate uses of the CFA designation EXCEPT:

A.require that members report legal violations to the appropriate governmental or regulatory organization.

B.do not require that members report legal violations to the appropriate governmental or regulatory organization.

C.expect members to resign from their jobs to disassociate themselves from clients engaging in illegal activities.

D.expect members to persuade the perpetrator to cease illegal activities.

A.that a maximum level of professional responsibility and conduct dictates that members be aware of and comply with laws, rules, and regulations governing their conduct.

B.companies should set standards based on the ethics of upper management and the board of directors.

C.that firms should comply with all domestic laws and regulations and that these laws also govern behavior in foreign markets, regardless of foreign laws and requirements.

D.that a minimum level of professional responsibility and conduct dictates that members be aware of and comply with laws, rules, and regulations governing their conduct.

A.Practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and their profession.

B.Strive to maintain and improve the competence of regulatory bodies such as the Securities and Exchange Commission (SEC).

C.Strive to maintain and improve the competence of others in the profession.

D.Use reasonable care and exercise independent professional judgment.

A.has discretionary authority in the administration of the pension plan; rende rs investment advice for a fee with respect to a pension plan’s assets; exercises any discretionary authority with the management of the pension plan or its assets.

B.has an executive position in the firm sponsoring the pension plan.

C.has an executive position in the firm sponsoring the pension plan; has discretionary authority in the administration of the pension plan.

D.exercises any discretionary authority with the management of the pension plan or its assets.

A.Cash and cash equivalents must be included in composite returns.

B.All actual, fee paying, discretionary portfolios should be included in at least one composite.

C.Investment performance is the record of the manager not the firm, all changes in personnel should be accounted for by adjusting the composite’s performance history.

D.Presentation of performance may be either gross or net of investment management fees, as long as the method and the fee schedule are disclosed.

A.A portfolio manager accepts free trades from XYZ for her personal account for directing the portfolio’s trades to XYZ. She does not inform her manager since there is no cash involved.

B.After informing his manager, a portfolio manager accepts money for giving a broker information relating to a client’s financial standing.

C.A portfolio manager is offered a free vacation to increase performance. At the end of the year performance is up and the manager accepts the vacation after info rming his manager of the fact.

D.A portfolio manager is unexpectedly offered a vacation at year-end from a client who was pleased with their portfolio’s performance. The manager accepts the vacation after informing her manager of the fact.

A.must report all legal violations to the proper regulatory commission and is held responsible for participating in illegal acts when the law is evident to anyone knowing the law.

B.is held responsible for violations by others when the analyst is unaware of the facts giving rise to the violation.

C.is held responsible for participating in illegal acts when the law is evident to anyone knowing the law and can participate in a violation by having knowledge of the violation and taking no action to stop it or disassociate from it.

D.is held responsible for participating in illegal acts when the law is evident to anyone knowing the law and is held responsible for violations by others when the analyst is unaware of the facts giving rise to the violation.

A.A young trainee bond trader tells a prospective client that she can assist the client in all the client’s investment needs: equity, fixed income, and derivatives and based on her years of experience as an analyst in the business that an investment looks like it has lots of potential.

B.All of these.

C.An investment manager recommends to a prospective client, an investment in mortgage IO strips because they are guaranteed by an agency of the federal government.

D.A broker says XYZ stock is 100% guaranteed to double in value over the next six months.

lients. They have not been in contact for more than three years. Recently, Alex suddenly called Yuan and said that he made a lot of money and wanted to invest in some high-risk and high-yield investment products. Yuan immediately recommended and invested in some private equity funds. As usual, Yuan also prepared the list of these funds, the details of the proceeds, and sent them to Alex monthly. Did Yuan most likely violate the CFA Institute Code of Ethics and Standards of Professional Conduct?

A.Yes, he violated for investing private equity funds.

B.Yes, he violated for the details of proceeds.

C.No.

stment return has exceeded 50% in the past three years. Based on that fact, he can guarantee such return to his new client in next year. Which of the following statements is the most accurate to comply with the CFA Institute Code of Ethics and Standards of Professional Conduct?

A.Yuan can guarantee that return to his client based on his excellent investment history.

B.Yuan does not need to mention his role in the history of investment action.

C.Yuan failed to distinguish the fact and opinion, he can’t use his historical investment return to imply the future performance.