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CFA level 1 2024 Questions and Answers Latest Updated
Exam of 159 pages for the course CFA at CFA (CFA level 1 2024)
[Meer zien]Voorbeeld 4 van de 159 pagina's
Voorbeeld 4 van de 159 pagina's
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Voorbeeld van de inhoud
CFA level 1 2024use compliance approach are most likely to - answer oversimplify decision making (may
not consider the larger picture)
To maintain trust, the investment management profession must be interdependent with:
- answer investment firms
legal activity but unethical - answer trading while in possession of material nonpublic
information (legal but trading unethical)
an ethical decision-making framework will most likely - answer help avoid a decision
that has unanticipated ethical consequences
when ethical dilemma occurs --> first raise issue with - answer senior individual in the
firm (NOT professional body's hotline)
A regulator who requires financial advisers to merely consider the suitability of a product
when making recommendations to their clients would most likely be setting:
A: both a legal and an ethical standard.
B: an ethical standard.
C: a legal standard. - answerC: a legal standard.
ethical conduct - answergoes beyond what is legally required
most important factor in promoting ethical decision making - answera strong culture of
integrity by the firm's senior management
most likely a critical aspect of the Consider phase of an ethical decision-making
framework - answerseeking additional guidance
contemplating your decision is found in the - answerReflect phase
example of overconfidence bias - answer"im smart, that will keep me out of trouble
ethical principles are sets of beliefs centered around - answersocieties' views on what is
considered good or bad conduct
the Standards of Practice Handbook provides guidance - answerto which all CFA
Institute members and candidates must adhere
,current Code of Ethics prinicple reads in full "Promote the integrity - answerand viability
of the global capital markets for the ultimate benefit of society"
revised 11th edition, the Standards of Professional Conduct - answeraddress the risks
and limitations of recommendations being made to clients
CFA Insitute member would violate the standard for material nonpublic infomration by -
answerinappropriately causing others to act
NOT conducting price distortion practices (bc that is Market Manipulation not Material
Nonpublic Information)
Based on the Conflicts of Interest standard, members and candidates must:
A disclose, as required by law, those conflicts interfering with their professional duties.
B disclose, as appropriate, any benefit paid to others for the recommendation of
products.
C seek employer approval before prioritizing their investment transactions over those
clients. - answerB disclose, as appropriate, any benefit paid to others for the
recommendation of products. (Referral fess)
A is wrong bc need to disclose all matters (not limited to legal requirements)
the Responsiblities as a CFA Insitute Member of CFA Candidate Standard explicitly
states a requirement regarding - answerreference to the CFA program
group is most likely responsible for maintaining oversight and responsibility for the
Professional Conduct Program (PCP) - answerCFA Insitute Board of Governors
sanctions imposes by CFA Insitute for violations of the CFA Insitute Code of Ethics or
Standards of Professional Conduct - answerpublic censure & revocation of a CFA
Charter
least likely: monetary fines
Which of the following is most likely found in the CFA Institute Standards of Professional
Conduct, Standard I-Professionalism? Members and candidates must:
A. 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.
B. place the integrity of the investment profession and the interest of clients above their
own interest.
C. maintain and improve their professional competence and strive to maintain and
improve the competence of other investment professionals. - answerA is correct (B & C
is in Code of Ethics)
Which of the following activities if undertaken by CFA Institute members and/or
candidates would most likely violate the Code and Standards?
A. An analyst discloses confidential, sensitive information about a client account as part
of an investigation by the CFA Institute Professional Conduct Program.
,B. A senior trader does not have safeguards in place to determine whether a junior
trader under their supervision is following the firm's policies regarding best execution.
C. An institutional portfolio manager takes a group of clients to an expensive restaurant
to discuss portfolio returns over the recently completed quarter without prior written
consent from his employer. - answerB is violate
not C bc no need employer permission
Bronson provides investment advice to the board of trustees of a private university
endowment fund. The trustees have provided Bronson with the fund's financial
information, including planned expenditures. Bronson receives a phone call on Friday
afternoon from Murdock, a prominent alumnus, requesting that Bronson fax him
comprehensive financial information about the fund. According to Murdock, he has a
potential contributor but needs the information that day to close the deal and cannot
contact any of the trustees. Based on the CFA Institute Standards, Bronson should:
A. Send Murdock the information because disclosure would benefit the client.
B. Not send Murdock the information to preserve confidentiality.
C. Send Murdock the information, provided Bronson promptly notifies the trustees. -
answerB. Not send Murdock the information to preserve confidentiality. (Bronson cannot
disclose confidential financial information to anyone without the permission of the fund)
--> C is wrong bc need permission before sending
Andrews, a private wealth manager, is conducting interviews for a new research analyst
for his firm. One of the candidates is Wright, an analyst with a local investment bank.
During the interview, while Wright is describing his analytical skills, he mentions a
current merger in which his firm is acting as the adviser. Andrews has heard rumors of a
possible merger between the two companies, but no releases have been made by the
companies concerned. Which of the following actions by Andrews is least likely a
violation of the Code and Standards?
A. Waiting until the next day before trading on the information to allow time for it to
become public.
B. Notifying all investment managers in his firm of the new information so none of their
clients are disadvantaged.
C. Placing the securities mentioned as part of the merger on the firm's restricted trading
list. - answerC. Placing the securities mentioned as part of the merger on the firm's
restricted trading list.
(adding securities to the firm's restricted list when the firm has or may have material
nonpublic infor --> adding --> Andrews would uphold this standards)
ABC Investment Management acquires a new, very large account with two
concentrated positions. The firm's current policy is to add new accounts for the purpose
of performance calculation after the first full month of management. Cupp is responsible
for calculating the firm's performance returns. Before the end of the initial month, Cupp
notices that one of the significant holdings of the new accounts is acquired by another
company, causing the value of the investment to double. Because of this holding, Cupp
decides to account for the new portfolio as of the date of transfer, thereby allowing ABC
Investment to reap the positive impact of that month's portfolio return.
, A. Cupp did not violate the Code and Standards because the GIPS standards allow
composites to be updated on the date of large external cash flows.
B. Cupp did not violate the Code and Standards because companies are allowed to
determine when to incorporat - answerC. Cupp violated the Code and Standards
because the inclusion of the new account produces an inaccurate calculation of the
monthly results according to the firm's stated policies.
Action 1: A firm is in possession of information about an upcoming stock buy back that
has not been publicly announced and places the stock on a restricted list and distribute
the list to all employees. - answeris not consistent (bc only few ppl responsible should
be included, not all employees)
Action 2: An analyst has been given information about a new product which the
company refuses to make the information public at the time. The analyst reports the
information only to her firm's compliance officer. - answeris consistent
Dilshan Kumar, CFA, is a world-renowned mining analyst based in London. Recently he
received an invitation from Cerberus Mining, a London Stock Exchange listed company
with headquarters in Johannesburg, South Africa. Cerberus asked Kumar to join a
group of prominent analysts from around the world on a tour of their mines in South
Africa, some of which are in remote locations, not easily accessible. The invitation also
includes an arranged wildlife safari to Krueger National Park for the analysts. Kumar
accepts the invitation planning to visit other mining companies he covers in Namibia and
Botswana after the safari. To prevent violating any CFA Institute Standards of
Professional Conduct, it is most appropriate for Kumar to only accept which type of paid
travel arrangements from Cerberus?
A. Ground transportation to Krueger National Park.
B. Economy class round trip ticket from London to Johannesburg.
C. Flights on a - answerC. Flights on a private airplane to the remote mining sites in
South Africa. (bc its remote, hard to get there)
Jack Steyn, CFA, recently became the head of the trading desk at a large investment
management firm that specializes in domestic equities. While reviewing the firm's
trading operations he notices that clients give discretion to the manager to select
brokers on the basis of their overall services to the management firm. Despite the client
directive, Steyn would most likely violate Standard III(A)-Loyalty, Prudence, and Care if
he pays soft commissions for which of the following services from the brokers?
A. Equity research reports
B. Investment conference attendance
C. Database services for offshore investments - answerC. Database services for
offshore investments (bc not benefit clients)
Sheila Schleif, CFA, is an equity analyst at an investment banking division of Mokara
Financial Group, a full service financial group. Schleif uses a multi-factor computer
model to make stock recommendations for all clients of Mokara. Schleif discovers that
the model contains an error. If the error were corrected, her most recent buy
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