Friday, November 14, 2008


Ray Stone, CFA, follows the Amity Paving Company for his employer. Which of the following scenarios is Stone least likely to have to disclose to his employer.

A)The fact that Stone's son worked at Amity as a laborer during the summer while in school.
B)Stone's personal relationship with the CEO of Amity.
C)Stone's ownership of Amity securities.
D)Stone's participation on Amity's board of directors.

answer : A


Pamela Gee is a portfolio manager. She is planning to establish her own money management firm. She has already informed her employer, Branford, Inc., about her plans. In her remaining time at Branford, she can:

A)solicit Branford colleagues but not Branford clients.
B)inform her current clients about her resignation and let them know how to reach her, in case any problems arise in the future.
C)prepare a list of information from Branford files that she can use for future reference in client solicitation.
D)start the registration of her new company.

answer : D

Wednesday, November 12, 2008


Which of the following statements is most correct under the Code and Standards?

A)Consent from the employer is necessary to permit independent practice that could result in compensation or other benefits in competition with the member's employer.
B)CFA Institute members are prohibited from undertaking independent practice in competition with their employer.
C)Written consent from the outside prospective client is necessary to permit independent practice that could result in compensation or other benefits in competition with the member's employer.
D)Members are prohibited from making arrangements or preparations to go into competitive business before terminating their relationship with their employer.
answer : A


Jones, Inc., is attempting to qualify for Global Investment Performance Standards (GIPS) compliance. Regarding mandatory disclosures, which of the following disclosures will be insufficient and thus prevent Jones, Inc., from claiming compliance?
A)Jones' definition of the firm is that they are a brokerage/portfolio management firm registered with the Securities and Exchange Commission (SEC).
B)Jones discloses all firm assets under active management each period.
C)Jones makes available a complete list and description of all of the firm’s composites.
D)Jones discloses all non-fee paying portfolios that are included in composites and notes the percentage of composite assets that are non-fee paying portfolios.

answer : B


Calvin Doggett, CFA, has been contacted by the CFA Institute Professional Conduct Program (PCP) regarding allegations that he has taken investment actions that were unsuitable for his clients. Doggett is questioned by PCP concerning the identity of his clients he considered suitable for investing in a very risky start-up company that eventually went bankrupt. Doggett will:

A)not violate the Code and Standards only if he reveals the financial condition and investment objectives of his clients on an anonymous basis and does not reveal the names of his clients to PCP.
B)not violate the Code and Standards by refusing to reveal information concerning his client's investments to the PCP.
C)violate the Code and Standards by fully cooperating with a PCP investigation if it means revealing confidential information.
D)not violate the Code and Standards by revealing the names, financial condition and investment objectives of his clients to PCP.

answer : D

Monday, November 10, 2008


All of the following are violations of Standard I(D), Misconduct, EXCEPT:
A) conviction of a crime involving fraud.
B)conviction of a misdemeanor involving civil disobedience in support of one’s personal beliefs.
C)dishonest activities that reflect negatively on professional competence even if they do not result in criminal convictions.
D)any conduct that undermines confidence that the CFA charter represents a level of achievement based on merit and ethical conduct.
answer: B


According to CFA Institute Standards of Professional Conduct, which of the following is NOT a form of plagiarism?

A)Using charts and graphs without stating their sources.
B)Citing specific quotations supposedly attributable to "leading analysts" and "investment experts" without specific reference.
C)Presenting statistical estimates of forecasts prepared by others with the source identified, but without qualifying statements or caveats that may have been used.
D)Using factual information published by recognized financial and statistical reporting services or similar sources without an acknowledgment.

answer: D


Within the Global Investment Performance Standards (GIPS) are supplemental provisions which must be applied to which of the following asset classes?

A)Private equity and real estate.
B)Emerging markets and private equity.
C)Hedge funds and derivatives.
D)Alternative investments and derivatives.

answer: A


Bob Hatfield, CFA, has his own money management firm with two clients. The accounts of the two clients are equal in value. One of the clients gets married and the assets of the new spouse and the client are combined. With the larger portfolio of the now married client, Hatfield determines that they can assume a higher level of risk and begins a change in the policy concerning that portfolio. Which of the following would violate Standard III(C), Suitability?
A)Assess the time horizon of the newly married client and his spouse.
B)Assess the return objectives of the newly married client and his spouse.
C)Notify the client of the change in policy and why he is enacting it.
D)Implement a similar policy for the other client who did not just get married.
answer: D


Julie Stades retired several years ago and relinquished her membership in CFA Institute. She had the CFA designation up until then. She has decided to go back to work and puts the following statement on her resume: “I earned the CFA designation 10 years ago.” Is this a violation of Standard VII(B)?
A)No, because she uses "CFA" as a noun.
B)Yes, because she uses "CFA" as a noun.
C)Yes, she has used the letters "CFA" in an undignified manner.
D)No, as long as she does not indicate she currently has the designation.
answer: D

Sunday, November 09, 2008

Practical Probelms_Partnership Act_6

Rohit is not a partner in a particular firm. But, he represents himself or knowingly permits himself to be represented as a partner of that particular firm to Sanjay, who on the faith of such a representation gives credit to the firm. Is Rohit liable as a partner in the firm ?

Practical Problems_Contract Act_90

Anurag promises to pay Rs. 11,000 to the management committee of a school by way of a donation. The management committee, on the basis of Anurag's promise, gets a Water Purifier System (Acquaguard) installed in the school at a cost of Rs.8,000 on credit. Now, Anurag refuses to pay the donation. What is the remedy available to the management committee of the school ? Give reasons.

Thursday, November 06, 2008

Practical Problems_Contract Act_89

Ram sells the goodwill of his shop to Shyam for Rs. 4,00,000 and promises not to
carry on such business forever and anywhere in India. Is it valid agreement ? Why ?

Practical Problems_Contract Act_88

Kamala promises Ramesh to lend Rs. 50,000 in lieu of consideration that Ramesh
gets Kamala’s marriage dissolved and himself marries with her. Is it valid agreement why ?