CFA 2018 Quest bank 08 Standards of Professional ...A Institute Member or CFA

Question #1 of 21

Question ID: 412627

ᅞ A) ᅚ B) ᅞ C)

Question #2 of 21

Question ID: 412622

ᅞ A) ᅞ B) ᅚ C)

Question #3 of 21

Question ID: 454928

Standards of Professional Conduct & Guidance

:

Responsibilities as a CFA

I

nstitute Member or CFA Candidate

Test ID:7440163

Anderson, BakerandChang allreceivedtheirCFAchartersandorderednew businesscards. Theirbusinesscardsareasfollows: G. J. Anderson, CFA

B. K. Baker, CharteredFinancialAnalyst

M. S. Chang,

C

.

F

.

A

Which ofthebusinesscardsusetheCFAmarksimproperly?

Anderson and Chang. Chang.

BakerandChang.

Explanation

Consistent with Standard VII(B), membersmustusetheCFAmarksinapropermanner. Membersmay indicate "CFA" or "Chartered FinancialAnalyst" aftertheirnames, butthedesignationshouldnotbe givenmoreprominencethanthatusedinprinting thenameitself. Also, periodsshouldnotbeusedtoseparatetheletters.

ACFA Institutememberputsthefollowing statementon herresume: "I passedeach leveloftheCFAexamonthefirsttry." Isthisa violationofStandard VII(B)?

Yes, because she incorrectly refers to the CFA exam.

Yes, becausesaying shepassedexamsonthefirsttry isnotappropriate. No, becauseitisastatementoffact.

Explanation

Thestatementisnota violationbecauseitisafact. However, themembermustnot goontoclaimsuperiorperformance.

Ron Vasquez isregisteredtositfortheCFA Level II exam. Unfortunately, Vasquez hasfailedtheexamthepasttwo years. In his frustration, Vasquez postedthefollowing commentonapopularinternetbulletinboard: "I believethatCFA Instituteisintentionally limiting thenumberofcharterholdersinordertoincreaseitscash flow by continuing tofailcandidates. Justlook atthepassrates."

ᅞ A)

in violation of both Standard I(D) Misconduct and Standard VII(A) Conduct as Participants in CFA Institute Programs.

in violationofStandard VII(A)ConductasParticipantsinCFA InstitutePrograms, butnotin violationofStandard I(D)Misconduct.

notin violationofStandard I(D)MisconductorStandard VII(A)ConductasParticipantsin CFA InstitutePrograms

Arethepromotionalmaterialspreparedby AckertandBrownfully consistent with theStandardsofProfessionalConduct?

Question #

6

of 21

Question ID: 412626

ᅚ A)

ᅞ B)

ᅞ C)

Question #

7

of 21

Question ID: 454929

ᅞ A) ᅚ B) ᅞ C)

Stadesisallowedtostatethatsheearnedthedesignationaslong asshedoesnotinferthatshecurrently hasthedesignation. Theletters "CFA" areonly tobeusedasanadjective, andshedoesthat.

Allofthefollowing situations violateStandard VII(B), ReferencetoCFA Institute, theCFA Designation, andtheCFAProgram, EXCEPT:

Karen Wright received her CFA charter in 1980.In 2001, she stopped payingher annual CFA Institute dues.Duringher retirement speech in 2002,Wright said,"AlthoughI am no longer an active CFA charterholder,Iwas awarded the right to use the CFA designation in 1980 and maintained active membership in CFA Institute for 20 years." JohnCabell hassatisfiedalltherequirementsimposedby CFA Institutefortherighttouse theCharteredFinancialAnalystdesignation. Hisbusinesscardssay: JohnCabell, C.F.A. Barney Latrell, whenintroducing himselftoaprospectiveclient, says, "I completedmy CFAin 1995, which requiredpassing threesix-hourexaminationsoverathree yearperiod."

Explanation

Wright'sstatementdidnot violateStandard VII(B). HerrighttousetheCFAdesignation wassuspended whenshestoppedpaying dues but herstatementisamatteroffact. Cabell's violatedStandard VII(B)because heimproperly usedtheCFAdesignationon hisbusiness card. ProperusageoftheCFAdesignationon hisbusinesscard wouldbe: JohnCabell, CFAor JohnCabell, CharteredFinancialAnalyst. Latrell violatedStandard VII(B)by using theCFAdesignationasanoun. TheCFAmark mustbeusedasanadjective. Latrellcould have stated, "I wasawardedtheCFAcharterin1995."

Forthepast 5 years, KarenBeckworth, CFA, hasservedasaproctorfortheCFAexam. Beckworth tells herassistant, aCFA Level III candidate, thatshenormally receivestheexaminationsontheThursday beforetheexam. Giventhelow passrateat Level III, Beckworth asks herassistantif he wouldlikeanadvancecopy ofthenextexam. Beckworth'sassistantdeclinestheoffer.

Beckworth'sassistant hasbeen very vocalaboutexpressing hisopinionsaboutthelow passrate. Theassistantclaims, "therearetoo many charterholdersandCFA Instituteisdeliberately failing candidatesbecausetheprestigeoftheCFAcharterisbecoming diluted." With regardtoStandard VII(A)ConductasParticipantsinCFA InstitutePrograms, which ofthefollowing statementsconcerning Beckworth'sand herassistant'sbehaviorismostaccurate?

Both Beckworth and her assistant are in violation of Standard VII(A). Beckworth isin violationofStandard VII(A), but herassistantisnotin violation. NeitherBeckworth nor herassistantisin violationofStandard VII(A).

Explanation

Question #

8

of 21

Question ID: 454927

Misrepresenting informationontheProfessionalConductStatementisadirect violationofStandard VII(A)ConductasParticipantsin CFA InstitutePrograms. Theotherchoicesare violationsofStandard VII(B)ReferencetoCFA Institute, theCFA Designation, andthe CFAProgram.

Which ofthefollowing statementsregarding disciplinary proceduresisleastaccurate?

Question #11 of 21

Question ID: 412628

ᅚ A)

ᅞ B)

ᅞ C)

Question #12 of 21

Question ID: 412617

ᅞ A) ᅚ B) ᅞ C)

Question #13 of 21

Question ID: 412623

totakeandpassthreerigorousexams.

Janet Olson, CFA, isananalystatQuantech Associates. Olsonattendedaconferenceat which Brian Wrightpresentedseveral proprietary computerizedspreadsheetsthat he haddevelopedto value high-tech stocks. Whileattheconference, Olsoncopiedthe spreadsheets without Wright's knowledge. Later, Olsonmadeseveralminorchangesto Wright'sinitialmodel. Aftertesting therevised model, Olson wasimpressed with theresults. Asinputsforthemodel, sheusedfactualmaterialssuppliedby Moody's InvestorsService, arecognizedfinancialandstatisticalreporting service. Olson wrotearesearch reportdescribing therevisedmodelanditsresultsand distributedthereporttoQuantech'sclients. According toCFA InstituteStandardsofProfessionalConduct, which ofthefollowing actions is Olsonrequiredtotake? Olsonis:

required to seek the authorization from Wright to copy the spreadsheets, acknowledge Wright for developing the initial model but is not required to acknowledge Moody's Investors Service as the source of the data.

requiredtoseek authorizationfrom Wrighttocopy thespreadsheetsandacknowledge Wright fordeveloping theinitialmodelandMoody's InvestorsServiceasthesourceofthedata. requiredtoacknowledgeMoody's InvestorsServiceasthesourceofthedatabutisnot requiredtoseek authorizationfrom Wrighttocopy thespreadsheetsortoacknowledge Wright fordeveloping theinitialmodel.

Explanation

Tocomply with Standard I(C)Misrepresentation, Olsonshould have gottentheauthorizationfrom Wrighttocopy thespreadsheets. The prohibitionagainstplagiarismrequiresthat Olsonidentify Wrightasthesourceoftheinitialmodel. However, theStandardpermits publishing factualinformationfromMoody's InvestorsService withoutacknowledgmentbecauseMoody'sisrecognizedasasourceof factualmaterials.

Nichole ZellerandRandy Toffler haveboth passed Level II oftheCFA ExamProgramand haveregisteredfor Level III. Zellercirculatesa resumestating thatsheisacandidatefortheCFAdesignationand haspassed Level II oftheCFAprogram. Tofflercirculatesaresume stating that heisaCFA II. Which ofthefollowing statementsisCORRECT?

BothZeller and Toffler have violated the Code of Standards. Only Toffler has violatedtheCodeofStandards.

Only Zeller has violatedtheCodeofStandards.

Explanation

ᅚ A)

Question #1

9

of 21

Question ID: 412611

ᅚ A) ᅞ B) ᅞ C)

Question #20 of 21

Question ID: 412624

ᅞ A) ᅚ B) ᅞ C)

Question #21 of 21

Question ID: 412631

ᅞ A) ᅞ B) ᅚ C) Explanation

TheCFAdesignationshouldalwaysbecapitalizedandshown withoutperiods. TheCFAdesignationshouldnotbereferredtoasadegree.

Placing thedesignation "CFA" or "CharteredFinancialAnalyst" afterone'snameonaresume, businesscard, brochure, orotherpublished materialisappropriate.

Which ofthefollowing statementsisa violationofStandard VII(B)ifitisincludedonaCFAcharterholder'sresume?

My earning the CFA designation indicates my superior ability.

My earning theCFAdesignationindicatesmy desiretomaintain high standards.

Both oftheseare violationsofStandard VII(B).

Explanation

ACFAcharterholdermay notmakeclaimsabout how earning thedesignationprovessuperiorcapabilities. Saying "my earning theCFA designationindicatesmy desiretomaintain high standards" isallowedbecauseitisafactualstatement

Judy AlbertandBobTye, whorecently startedtheirowninvestmentadvisory business, plantotakethe Level III CFAexaminationnext

year. Albert'sbusinesscardreads, "Judy Albert, CFACandidate." Tye hasnotputanything abouttheCFAon hisbusinesscard. However, thefirm'spromotionalmaterialsdescribetheCFArequirementsandindicatethatTyeparticipatesintheCFAprogramand has completed Levels I and II. According toCFA InstituteStandardsofProfessionalConduct:

Neither Albert nor Tye has violated the Standards. Albert has violatedtheStandardsbutTye hasnot.

Both AlbertandTye have violatedtheStandards.

Explanation

Onletterheadsandbusinesscardsandindirectory listings, only themark CFAorthe wordsCharteredFinancialAnalystshouldappear afterthecharterholder'sname.

Ralph LimandSusanBland haveboth passed Level I oftheCFAProgram. Both arecurrently enrolledtositfor Level II. Lim'sbusiness cardreads, "Ralph Lim, CFA Level I." Bland'sresumestates, "Level II CandidateintheCFAProgram." According toCFA Institute StandardsofProfessionalConductinvolving useoftheprofessionaldesignation:

BothLim and Bland violated the Standard. Bland violatedtheStandard, but Limdidnot. Lim violatedtheStandard, butBlanddidnot.