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Question 1 of 10
1. Question
The following points are policies that CFA members and candidates should pursue and advise respective companies to address the aforementioned issue while preparing statements or policy guides. Which of the following is not covered by these policies?
Correct
There are the aspects that CFA Members and Candidates must re-evaluate for the adequacy and appropriateness of the investment:
(1) The expectations and conditions of the client
(2) the basic characteristics of portfolios
(3) the basic characteristics of the portfolioIncorrect
There are the aspects that CFA Members and Candidates must re-evaluate for the adequacy and appropriateness of the investment:
(1) The expectations and conditions of the client
(2) the basic characteristics of portfolios
(3) the basic characteristics of the portfolio -
Question 2 of 10
2. Question
Whenever there’s an absence of regulatory guidance or firm policies, what is the minimum amount of years the CFA Institute recommends regarding maintaining records?
Correct
Local regulators also place restrictions on CFA Members, Candidates, and their businesses in terms of record retention. Firms can also have rules in place that govern how long research and customer contact information must be maintained
Incorrect
Local regulators also place restrictions on CFA Members, Candidates, and their businesses in terms of record retention. Firms can also have rules in place that govern how long research and customer contact information must be maintained
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Question 3 of 10
3. Question
Elisha seems to be the head of the research department of a major brokerage firm and there have been several analysts employed throughout the firm who have been subjected to the Code and Standards. If Elisha delegates certain supervisory duties to another one of them, which of the following cases best defines her obligations before the Code and the Standards?
Correct
Supervisors, CFA Members, and Candidates can delegate supervisory duties to other team members, but such delegation does not relieve CFA Members or Candidates of their supervisory responsibilities, according to Standard IV(C) — The responsibilities of Supervisors, CFA Members, and Candidates. Supervisors must also make every effort to ensure that all team members adhere to relevant rules, business policy, and a code of conduct.
Incorrect
Supervisors, CFA Members, and Candidates can delegate supervisory duties to other team members, but such delegation does not relieve CFA Members or Candidates of their supervisory responsibilities, according to Standard IV(C) — The responsibilities of Supervisors, CFA Members, and Candidates. Supervisors must also make every effort to ensure that all team members adhere to relevant rules, business policy, and a code of conduct.
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Question 4 of 10
4. Question
Which of the following actions will ensure fair treatment of brokerage firm’s clients whenever a new investment recommendation is made?
Correct
There are two key reasons why clients should be informed about referral fees under Standard VI(C)— Referral Fees. The other is to encourage customers and employers to assess the total cost of services. It does not, however, enable CFA Members or Candidates to discount their fees if they collect referral fees, and it should be communicated to prospective clients before entering into a formal agreement.
Incorrect
There are two key reasons why clients should be informed about referral fees under Standard VI(C)— Referral Fees. The other is to encourage customers and employers to assess the total cost of services. It does not, however, enable CFA Members or Candidates to discount their fees if they collect referral fees, and it should be communicated to prospective clients before entering into a formal agreement.
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Question 5 of 10
5. Question
Which of the following statements best describes the purpose of disclosure in Standard IV – Referral Fees?
Correct
This Fair Dealing principle examines data on tactics that can assist individuals and candidates in handling consumers fairly while making investment recommendations. This will aid in ensuring that consumers are treated fairly. The more individuals who worry about an impending transition, the more remarkable is the likelihood that someone can educate a few clients before the release of the material. The company should devise plans to limit the number of people who are aware that a decision would be made public ahead of time.
Incorrect
This Fair Dealing principle examines data on tactics that can assist individuals and candidates in handling consumers fairly while making investment recommendations. This will aid in ensuring that consumers are treated fairly. The more individuals who worry about an impending transition, the more remarkable is the likelihood that someone can educate a few clients before the release of the material. The company should devise plans to limit the number of people who are aware that a decision would be made public ahead of time.
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Question 6 of 10
6. Question
Last week, John took the Level III CFA, but later on, he updates his resume saying that he improved a lot of his skills as well as stating that he is already eligible for the CFA charter upon his completion. Is it true that John violated the code and standards of the CFA program?
Correct
Any CFA Member or Candidate cannot claim to have completed the CFA curriculum or to be qualifying for the CFA charter unless they have formally learned that they have passed the Level III test. Unless the results of the most recent test are announced, those who attended the exam, just like John, can continue to refer to themselves as “candidates.”
Incorrect
Any CFA Member or Candidate cannot claim to have completed the CFA curriculum or to be qualifying for the CFA charter unless they have formally learned that they have passed the Level III test. Unless the results of the most recent test are announced, those who attended the exam, just like John, can continue to refer to themselves as “candidates.”
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Question 7 of 10
7. Question
Golden Industries hired Malory to handle their pension fund. Who would Malory owe her duty of loyalty, care, and prudence?
Correct
In compliance with the provisions of Standard III(A) concerning loyalty, prudence, and treatment. CFA Members and Candidates who administer the pension fund of the company owe these responsibilities to the participants and beneficiaries of the pension scheme, not to the managers of the company, the customers, or the owners of the company. In order to fulfill this expectation, long-term goals must be deliberately assessed against the short-term expectations of the business raised by the takeover bid and the opportunity to invest elsewhere.
Incorrect
In compliance with the provisions of Standard III(A) concerning loyalty, prudence, and treatment. CFA Members and Candidates who administer the pension fund of the company owe these responsibilities to the participants and beneficiaries of the pension scheme, not to the managers of the company, the customers, or the owners of the company. In order to fulfill this expectation, long-term goals must be deliberately assessed against the short-term expectations of the business raised by the takeover bid and the opportunity to invest elsewhere.
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Question 8 of 10
8. Question
The following statements are the Manager’s responsibility to their client except one:
Correct
The Code and Standards describe the ethical and professional roles of administrators managing funds in favor of clients in six different categories:
(1) Client satisfaction
(2) Investment process and activities
(3) Trade
(4) Risk control, enforcement, and assistance
(5) Performance monitoring and valuation
(6) DisclosuresIncorrect
The Code and Standards describe the ethical and professional roles of administrators managing funds in favor of clients in six different categories:
(1) Client satisfaction
(2) Investment process and activities
(3) Trade
(4) Risk control, enforcement, and assistance
(5) Performance monitoring and valuation
(6) Disclosures -
Question 9 of 10
9. Question
Which of the following statements best describes the purpose of IPS?
Correct
The IPS is a living text that outlines the relationship between the customer and the consultant and establishes specific priorities and constraints on the portfolio, and the IPS serves as the framework for determining a client’s strategic asset distribution that is exclusive to each investor. The details found in the IPS helps managers to determine whether a specific policy or protection is appropriate for a client depending on the rest of the portfolio of the client.
Incorrect
The IPS is a living text that outlines the relationship between the customer and the consultant and establishes specific priorities and constraints on the portfolio, and the IPS serves as the framework for determining a client’s strategic asset distribution that is exclusive to each investor. The details found in the IPS helps managers to determine whether a specific policy or protection is appropriate for a client depending on the rest of the portfolio of the client.
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Question 10 of 10
10. Question
Which of the following statements is correct under the Code and Standards?
Correct
Following Standard IV – Loyalty. CFA Members and Applicants should behave for the sake of their employer and not resist the advantage of their skills and abilities, reveal private data, or, in any event, do harm to their employer. Independent practice can result in pay or other incentives in comparison with their employer as long as they receive consent.
Incorrect
Following Standard IV – Loyalty. CFA Members and Applicants should behave for the sake of their employer and not resist the advantage of their skills and abilities, reveal private data, or, in any event, do harm to their employer. Independent practice can result in pay or other incentives in comparison with their employer as long as they receive consent.