Since her business activity of designing clothes is not related to her investing activities at Global Assets, it does not pose any conflict of interest.. Standard III C Suitability does
Trang 1Level III SS 1 & 2 Item Set Quiz
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1 A is correct Since her business activity of designing clothes is not related to her investing activities at Global Assets, it does not pose any conflict of interest Hence, such a business activity need not be disclosed to her employer and clients
2 A is correct Standard III (C) Suitability does not appear to have been violated because the fund
is characterized as a high-risk investment and it is clearly stated that MiraclePro is also a high risk investment Jane’s statement that the fund benefited from
capitalization for MiraclePro last year is a violation of Standard I
the fund had only recently invested in the stock so did not benefit from the large move in the stock’s price Standard II (A) Material
board member who shared material nonpublic information with the fund and by the fund because it acted on the information
3 C is correct The commission arrangement with OneLife is acceptable but needs to
4 C is correct Standard IV (B) Addition Compensation Arrangements is not violated Holding a competition to encourage sales is unlikely to cause a conflict of interest with the employer’s interests In order to win the award, sales represen
lose sight of what is best for the customer Hence, Standard III (A) Loyalty, Prudence and Care and Standard III (C) Suitability might be violated
5 C is correct The fund management business will comply with t
disclosure to clients regarding any possible conflicts of interest
6 B is correct because the Code calls for the Manager to maximize client portfolio value by seeking best execution for all client transactions If trades only go th
execution cannot be assured
Item Set Quiz 1 Solution (6 questions, 18 minutes)
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A is correct Since her business activity of designing clothes is not related to her investing activities at Global Assets, it does not pose any conflict of interest Hence, such a business activity need not be disclosed to her employer and clients
(C) Suitability does not appear to have been violated because the fund risk investment and it is clearly stated that MiraclePro is also a high risk investment Jane’s statement that the fund benefited from the doubling of market capitalization for MiraclePro last year is a violation of Standard I (C) Misrepresentation because the fund had only recently invested in the stock so did not benefit from the large move in the
(A) Material Nonpublic Information has also been violated by the board member who shared material nonpublic information with the fund and by the fund because it acted on the information
C is correct The commission arrangement with OneLife is acceptable but needs to
(B) Addition Compensation Arrangements is not violated Holding a competition to encourage sales is unlikely to cause a conflict of interest with the employer’s interests In order to win the award, sales representatives might be too eager to sell and could lose sight of what is best for the customer Hence, Standard III (A) Loyalty, Prudence and Care and Standard III (C) Suitability might be violated
The fund management business will comply with the Code if it makes full disclosure to clients regarding any possible conflicts of interest
B is correct because the Code calls for the Manager to maximize client portfolio value by seeking best execution for all client transactions If trades only go through one stockbroker, best
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A is correct Since her business activity of designing clothes is not related to her investing activities at Global Assets, it does not pose any conflict of interest Hence, such a business
(C) Suitability does not appear to have been violated because the fund risk investment and it is clearly stated that MiraclePro is also a
high-the doubling of market (C) Misrepresentation because the fund had only recently invested in the stock so did not benefit from the large move in the
Nonpublic Information has also been violated by the board member who shared material nonpublic information with the fund and by the fund
C is correct The commission arrangement with OneLife is acceptable but needs to be disclosed
(B) Addition Compensation Arrangements is not violated Holding a competition to encourage sales is unlikely to cause a conflict of interest with the employer’s
tatives might be too eager to sell and could lose sight of what is best for the customer Hence, Standard III (A) Loyalty, Prudence and Care
he Code if it makes full
B is correct because the Code calls for the Manager to maximize client portfolio value by
rough one stockbroker, best