Ethical And Professional Standards - Ethical And Professional Standards Section 2
- Option : A
- Explanation : Refer to Standard V(C) Record Retention. Jaffery must carefully document and maintain copies of all information that goes in his reports in order to avoid violation of Standard V(C).
- Option : C
- Explanation : Bentley should determine whether the investment is suitable to the client’s financial situation. She should make an inquiry into the risk and return objectives of the client before making any recommendations. Refer to Standard III(C) Suitability.
- Option : C
- Explanation : There is no evidence of discrimination among clients. However, by recommending the stock without due diligence, the analyst has violated Standard V(A) Diligence and Reasonable Basis, and Standard III (C) Suitability.
- A
is a violation of the Standards as members should stay informed of the changes in applicable laws.
- B
not a violation of the Standards since the exposure is through international funds and not domestic tobacco companies.
- C
not a violation since it is a recommended procedure and a member cannot be expected to keep track of the laws of all the countries his clients are from.
- Option : A
- Explanation : If it is illegal to hold stocks of tobacco companies, Bart should have taken steps to stay informed of the applicable laws. Refer to Standard I(A) Knowledge of the Law.
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