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CAIA level 1 Exam/310 Questions with Accurate Answers
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CAIA level 1 Exam/310 Questions with Accurate Answers
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CAIA level 1 Exam/310 Questions withAccurate Answers
Standard I(A) - Knowledge of Law - -Understand and comply with all
applicable laws, rules and regulations (including the CFA institutes code) of
any government, regulatory organization, licensing agency, or professional
association governing their professional activities. In the event of a conflict,
comply with the more strict law, rule or regulation. Must not knowingly
participate or assist in and must disassociate from any violation of such laws,
rules or regulations
-Standard I(B)- Independence and Objectivity - -Use reasonable care and
judgement to achieve and maintain independence and objectivity in their
professional activities. Must not offer, solicit, or accept any gifts, benefit,
compensation or consideration that reasonably could be expected to
compromise their own or another independence and objectivity
-Standard I(C)- Misrepresentations - -Must not knowingly make any
misrepresentations relating to investment analysis, recommendations
actions or other professional activities
-Standard I(D) Misconduct - -Must not engage in any professional conduct
involving dishonesty, fraud, or deceit or commit any act that reflects
adversely on their professional reputation, integrity or competence
-Standard II: Integrity of Capital Markets - -A. Material Nonpublic Information
B. Market Manipulation
-Standard I: Professionalism - -A. Knowledge of the Law
B. Independence and Objectivity
C. Misrepresentation
D. Misconduct
-Standard II(A) Material Nonpublic Information - -Members and Candidates
who possess material nonpublic information that could affect the value of an
investment must not act or cause others to act on the information.
-Standard II B - Market Manipulation - -Members must not engage in
practices that distort prices or artificially inflate volume with the intent to
mislead market participants
-Standard III: Duties to Clients - -A. Loyalty, Prudence, and Care
B. Fair Dealing
C. Suitability
,D. Performance Presentation
E. Preservation of Confidentiality
-Standard III(A) - Loyalty, Prudence, and Care - -Members and Candidates
have a duty of loyalty to their clients and must act with reasonable care and
exercise prudent judgment. Members and Candidates must act for the
benefit of their clients and place their clients' interests before their
employer's or their own interests.
-Standard III(B) Fair Dealing - -Members and Candidates must deal fairly
and objectively with all clients when providing investment analysis, making
investment recommendations, taking investment action, or engaging in
other professional activities.
-Standard III(C) Suitability - -When Members and Candidates are in an
advisory relationship with a client, they must:
Make a reasonable inquiry into a client's or prospective client's investment
experience, risk and return objectives, and financial constraints prior to
making any investment recommendation or taking investment action and
must reassess and update this information regularly.
Determine that an investment is suitable to the client's financial situation
and consistent with the client's written objectives, mandates, and constraints
before making an investment recommendation or taking investment action.
Judge the suitability of investments in the context of the client's total
portfolio.
When Members and Candidates are responsible for managing a portfolio to a
specific mandate, strategy, or style, they must make only investment
recommendations or take only investment actions that are consistent with
the stated objectives and constraints of the portfolio.
-Standard III(D) Performance Presentation - -When communicating
investment performance information, Members and Candidates must make
reasonable efforts to ensure that it is fair, accurate, and complete.
-Standard III(E) Preservation of Confidentiality - -Members and Candidates
must keep information about current, former, and prospective clients
confidential unless:
The information concerns illegal activities on the part of the client;
Disclosure is required by law; or
,The client or prospective client permits disclosure of the information.
-Standard IV: Duties to Employers - -A. Loyalty
B. Additional Compensation Arrangements
C. Responsibilities of Supervisors
-Standard IV(A) Loyalty - -In matters related to their employment, Members
and Candidates must act for the benefit of their employer and not deprive
their employer of the advantage of their skills and abilities, divulge
confidential information, or otherwise cause harm to their employer.
-Standard IV(B) Additional Compensation Arrangements - -Members and
Candidates must not accept gifts, benefits, compensation or consideration
that competes with, or might reasonably be expected to create a conflict of
interest with their employers unless they obtain written consent from all
parties involved.
-Standard IV(C) Responsibilities of Supervisors - -Members and Candidates
must make reasonable efforts to ensure that anyone subject to their
supervision or authority complies with applicable laws, rules, regulations,
and the Code and Standards.
-Standard V: Investment Analysis, Recommendations, and Actions - -A.
Diligence and Reasonable Basis
B. Communication with Clients and prospective clients
C. Record Retention
-Standard V(A) - Diligence and Reasonable Basis - -Members and
Candidates must:
1. Exercise diligence, independence, and thoroughness in analyzing
investments, making investment recommendations, and taking investment
actions.
2. Have a reasonable and adequate basis, supported by appropriate research
and investigation, for any investment analysis, recommendation, or action.
-Standard V(B) - Communication with Clients and Prospective Clients - -
Members and candidates must:
1. Disclose to clients and prospective clients the basic format and general
principles of the investment process used to analyze investments, select
securities, and construct portfolios and must promptly disclose any changes
that might materially affect those processes
2. Disclose to clients and prospective clients significant limitations and risks
accounted with the investment process
3. Use reasonable judgement to identify with factors are important to their
investment analyses, recommendations, or actions and include those factors
in communications with clients and prospective clients
, 4. Distinguish between fact and opinion in the presentation of investment
analyses and recommendations
-Standard V(C) Record Retention - -Members and Candidates must develop
and maintain appropriate records to support their investment analyses,
recommendations, actions, and other investment-related communications
with clients and prospective clients.
-Standard VI: Conflicts of Interest - -A. Disclosure of Conflicts
B. Priority of Transactions
C. Referral Fees
-Standard VI(A) - Disclosure of Conflicts - -Members and Candidates must
make full and fair disclosure of all matters that could reasonably be expected
to impair their independence and objectivity or interfere with respective
duties to their clients, prospective clients, and employer. Members and
Candidates must ensure that such disclosures are prominent, are delivered
in plain language, and communicate the relevant information effectively.
-Standard VI(B) - Priority of Transactions - -Investment transactions for
clients and employers must have priority over investment transactions in
which a Member or Candidate is the beneficial owner.
-Standard VI(C) Referral Fees - -Members and Candidates must 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.
-Traditional Investments - -include publicly traded equities, fixed-income
securities, and cash
-Real Assets - -associated with investments that directly control non-
financial assets and represent actual rights to consumption rather than
financial claims to cash flows generated by the tangible and intangible
assets of a firm. Examples:
1. Real Estate (land and permanent improvements to the land; land- raw
land, timberland and farmland)
2. Infrastructure investments (investments represent claims on the cash
flows generated by the assets)
3. intellectual property
4. Natural Resources
5. Commodities
-Hedge Funds - -Private investment vehicles that typically use leverage,
derivatives, and long and short investment strategies. Minimal regulatory
restrictions.
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