Which of the following statements are TRUE？

A.Neither of these are correct.

B.With the installment sales method sales are recognized when cash is received but profits are only recognized after all costs have been recovered.

C.Both of these are correct.

D.With the cost recovery method sales and profits are recognized as cash is received.

A.Accounting income recognizes both current period actual cash flows and changes in asset value.

B.Reported income under the accrual concept provides a measure of current operating performance based solely on actual current period cash flows.

C.The accounting process only recognizes value changes arising from actual transactions.

D.Accrual accounting may allocate transactions and cash flows to time periods other than those in which the cash flows occur.

A.A local subsidiary corporation that provides investment management business.

B.A transnational investment consulting services company.

C.An independence investment research firm.

A.should follow the stricter standard between local laws and GIPS.

B.should calculate and present two groups of investment performance data separately complying with local laws and GIPS.

C.should comply with local laws and disclose the conflicts.

A.Compliance with GIPS is the best way to adhere to Standard I(C)-Misrepresentation and Standard III (D)-Performance Presentation.

B.Compliance with GIPS is the only way to adhere to Standard I(C)-Misrepresentation and Standard III (D)-Performance Presentation.

C.Compliance with GIPS is claimed by the regulatory agency.

arge of developing and promoting a new structured financial product, CBO ( bond obligation), which includes many emerging-market corporate bonds. In the product-related catalog, Button discloses a list of selected underlying bonds. The catalog also mentions about one independent collateral agency, who has discretion over the selection of all corporate bonds. In fact, Button has discussed with the collateral agency manager many times and instructed him to select bonds for the CBO. Button is most likely to violate which of the following CFA Institute Standards of Professional Conduct?

A.Disclosure of Conflicts.

B.Suitability.

C.Diligence and Reasonable Basis.

ancial Times Magazine, which is published according to its business function, always recommends securities to the market. Once the magazine is published, it always guides those recommended stocks to a fairly good performance. According to the recommendation, Michael often trades stocks before the magazine is published. Meanwhile, ANZ bank’s compliance department requires all portfolio managers or analysts to obtain prior approval for the transaction. Which of the following CFA Institute Standards of Professional Conduct does Michael most likely violate?

A.Independence and Objectivity.

B.Material Nonpublic Information.

C.Disclosure of Conflicts.

of money in their accounts. Yuan thinks that a recession is coming, so he begins to increase the proportion of less risky assets in each account. In order to comply with Standard V (B), Communication with Clients and Prospective Clients, Yuan should:

A.ensure that he does the same investment strategy for both clients.

B.communicate with both clients about the change and inform them that the investment is based on his opinion.

C.do both of that.

n business. Based on his memories, he recreated the investment model he made at his former employer. Anderson provided the model to some prospective clients as an example to prove his abilities. Did Anderson violate any CFA Institute Standards of Professional Conduct?

A.Yes, with regard to Standard V (C)-Record Retention.

B.Yes, with regard to Standard V (B)-Communication with Clients.

C.No.

d predictions from an econometric model developed by his colleagues. He highlighted the source of this projection. The report also contained all relevant statistical data on the model and his comments on the accuracy of the model. For the Standard V (A)-Diligence and Reasonable Basis, Yuan had:

A.not violated the Standard V (A).

B.violated the Standard by including quantitative details in the report.

C.violated the Standard by not testing the model himself.