Exam (elaborations) FIN 3701 (FIN3701) V2_Exam_1_PM[1]
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Course
FIN 3701 (FIN3701)
Institution
University Of South Africa
Question #1 of 120 Question ID:
Questions 1 through 18 relate to Ethical and Professional Standards. (27 minutes)
Ray Brown, CFA, gives prospects his firm's marketing materials, not prepared by him, that indicate he has a graduate degree from State University, when in fact he did graduate wo...
that indicate he has a graduate degree from state university
when in fact he did graduate work there but did no
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University Of South Africa
FIN 3701 (FIN3701)
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CFA Level I
Question #1 of 120 Question ID:
1214547
Questions 1 through 18 relate to Ethical and Professional Standards. (27 minutes)
Ray Brown, CFA, gives prospects his firm's marketing materials, not prepared by him, that indicate he has a graduate
degree from State University, when in fact he did graduate work there but did not receive a degree. Brown informed
the marketing department of this error when he first saw it. Brown has:
A) violated the Standards by misrepresenting his qualifications.
B) not violated the Standards because he has informed his firm of the mistake.
C) not violated the Standards because he did not prepare the marketing
materials or misrepresent his credentials to his firm.
Question #2 of 120 Question ID:
1214562
John Larsen, CFA, is creating his investment firm's initial GIPS-compliant performance results. He would like to
supplement the historical performance numbers with older, non-GIPS-compliant data. According to GIPS, is
this allowed?
A) GIPS results cannot include presentation of any noncompliant performance data.
B) After the initial, GIPS-compliant performance results are presented, a firm
may go back further and present non-compliant performance data, but no
non-compliant results can be included for time periods after January 1, 2000.
C) As long as five years of GIPS-compliant performance results are presented, the
firm can go back further and present non-compliant performance data.
Question #3 of 120 Question ID:
1214556
Jenny Pickler, a Level II CFA Candidate, writes an economic forecast containing several interest rate projections. Her
firm's investment committee reviews Pickler's report and changes several of the interest rates Pickler had forecast. To
comply with CFA Institute Standards, Pickler:
A) does not need to take any further action.
B) should ask that her name be removed from the report.
C) is required to independently review the data supporting the investment committee’s changes.
,
,Question #4 of 120 Question ID:
1214546
Which of the following statements is most accurate about the Standard concerning knowledge of the law? Members
and candidates are responsible for violations:
A) that are proven by a regulatory authority.
B) of which they are aware or should be aware.
C) in which they knowingly participate or assist.
Question #5 of 120 Question ID:
1214549
Andrew Pollard, CFA, overhears two executives from a multinational oil company discussing an unexpectedly large
earnings increase the company is preparing to announce the following morning. When Pollard gets home that
evening, he places an order to buy shares in this oil company. Which of the following best describes this situation?
A) Pollard violated the Standards by acting on material nonpublic information.
B) There is no violation of CFA Institute Standards, since this was simply an
overheard conversation.
C) Pollard violated CFA Institute Standards by not contacting counsel for advice
before placing the trade.
Question #6 of 120 Question ID:
1214548
Recommended procedures for compliance with the Standard concerning misconduct suggest that firms in the
investment industry should:
A) periodically test their employees’ knowledge of applicable laws, regulations,
and the firm’s code of ethics.
B) periodically inform employees of violations that have occurred and the
disciplinary actions that the firm took against the employees involved.
C) check references of potential employees to verify that they are of good
character and eligible for employment in the investment industry.
Question #7 of 120 Question ID:
1214557
Which of the following statements is most accurate? An analyst who changes employers and wants to maintain coverage
of a stock:
A) may copy supporting records from the prior firm and use them at the new firm.
B) must re-create the supporting records at the new firm with information from
public sources or from the covered firm.
, C) may maintain his recommendations at the new firm without re-creating
the supporting documentation if those recommendations had a
reasonable basis.
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