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Ethical And Professional Standards MCQ - Ethical And Professional Standards Section 1

36 Which Standard requires members and candidates responsible for managing a portfolio to a specific mandate, strategy, or style, to make investment recommendations or take investment actions that are consistent with the stated objectives and constraints of the portfolio?

Refer to Standard III(C) Suitability.

37 Which of the following statements is most accurate according to the Standards of Practice Handbook? Members and Candidates:

Refer to Standard III(E) Preservation of Confidentiality.

38 Which Standard relates to distinguishing between fact and opinion in the presentation of investment analysis and recommendations?

Refer to Standard V(B) Communication with Clients and Prospective Clients.

39 A member gets verbal consent from his employer before accepting a 7-day vacation for him and his family at his client’s private villa in southern Spain, including travel in a private jet as it is in a remote location. This was in appreciation for the outstanding performance of his client’s portfolio. Did the member violate any Standard?

The member failed to obtain written consent and a gift such as is this might potentially create a conflict of interest.

40 Which Standard requires Members and Candidates to disclose to their employer, clients, and prospective clients, as appropriate, any compensation, consideration or benefit received from or paid to others for the recommendation of products or services?

Refer to Standard VI(C) Referral Fees.

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Question:

Which of the following statements is most accurate according to the Standards of Practice Handbook? Members and Candidates:

A. who possess nonmaterial nonpublic information that could affect the value of an investment must not act or cause others to act on the information.
B. who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.
C. who possess nonmaterial public information that could affect the value of an investment must not act or cause others to act on the information.

Correct answer: B

Explanation:

Refer to Standard II(A) Material Nonpublic Information.

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