Ethical and Professional Standards Q120

0. Martina Bart, CFA, is working as a portfolio manager at a large global investment manager. Most of her clients are residents of a conservative country called Inara, where the new government has introduced a new law barring equity holdings in tobacco companies. Bart‟s clients have significant exposure to tobacco companies through international funds in their portfolio because of the handsome returns they have earned in the past. Three months have passed, Bart is unaware of the change in law and takes no action. According to the Standards, his inaction is:

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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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