Datasets:

alvinming

/

CFA-Level-III

like 0

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:To best comply with the CFA Institute Standards of Professional Conduct (the Standards) related to performance presentation, Somer should modify the:; Answer Choices: A: text regarding Somer's investment returns., B: presentation of the performance for Karibe's representative composite., C: content of the disclosure statement related to assumptions and calculations.. Answer:

A

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:To best comply with the CFA Institute Standards of Professional Conduct (the Standards) related to performance presentation, Somer should modify the:; Answer Choices: A: text regarding Somer's investment returns., B: presentation of the performance for Karibe's representative composite., C: content of the disclosure statement related to assumptions and calculations.. Answer:

Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price. Question:To best comply with the CFA Institute Standards of Professional Conduct (the Standards) related to performance presentation, Somer should modify the: Choices: A: text regarding Somer's investment returns., B: presentation of the performance for Karibe's representative composite., C: content of the disclosure statement related to assumptions and calculations..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:Does Somer's social media post result in a violation of the Standards?; Answer Choices: A: No, B: Yes, he violates the standard related to preservation of confidentiality, C: Yes, he violates the standard related to communication with clients and prospective clients. Answer:

A

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:Does Somer's social media post result in a violation of the Standards?; Answer Choices: A: No, B: Yes, he violates the standard related to preservation of confidentiality, C: Yes, he violates the standard related to communication with clients and prospective clients. Answer:

Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price. Question:Does Somer's social media post result in a violation of the Standards? Choices: A: No, B: Yes, he violates the standard related to preservation of confidentiality, C: Yes, he violates the standard related to communication with clients and prospective clients.

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:When preparing the marketing materials for the quantitative strategy, did Somer comply with the standard related to communication with clients and prospective clients?; Answer Choices: A: Yes, B: No, because he did not identify the risk of coding errors, C: No, because he did not describe the investment process in detail. Answer:

A

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:When preparing the marketing materials for the quantitative strategy, did Somer comply with the standard related to communication with clients and prospective clients?; Answer Choices: A: Yes, B: No, because he did not identify the risk of coding errors, C: No, because he did not describe the investment process in detail. Answer:

Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price. Question:When preparing the marketing materials for the quantitative strategy, did Somer comply with the standard related to communication with clients and prospective clients? Choices: A: Yes, B: No, because he did not identify the risk of coding errors, C: No, because he did not describe the investment process in detail.

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:If he fills the client's order for shares of the technology firm, would Somer violate the standard related to priority of transactions?; Answer Choices: A: No, B: Yes, because the client would be disadvantaged by the trade, C: Yes, because he would benefit personally from a trade undertaken for a client. Answer:

C

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price.; Question:If he fills the client's order for shares of the technology firm, would Somer violate the standard related to priority of transactions?; Answer Choices: A: No, B: Yes, because the client would be disadvantaged by the trade, C: Yes, because he would benefit personally from a trade undertaken for a client. Answer:

Scenario: TOPIC: ETHICAL AND PROFESSIONAL STANDARDS TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Edgar Somer, CFA, was recently hired as a portfolio manager at Karibe Investment Management. Somer previously worked at a rival firm where he produced an average annual return of 11% using a small-cap value strategy. On his first day at Karibe, the firm asks Somer to approve marketing materials that present the following performance disclosures. • Text which states: “Somer has generated average annual returns of 11%” • The 3-year performance of a composite of Karibe client accounts that follow a similar small-cap value strategy • A disclosure that the assumptions and calculations underlying the returns presented are publicly available on Karibe's public website To maintain relationships with clients and to attract prospective clients, Somer is active on social media. He posts a link to a news story about a famous athlete who recently paid substantial tax penalties after failing to properly report investment gains. In addition to the link Somer writes the comment: “A client of mine had similar gains, but because I kept proper records he faced no penalties. #HireAProfessional”. Some responses to the post suggest that readers mistakenly believe the athlete is Somer's client. Somer does not post a clarifying comment. Somer develops a new quantitative investment strategy that he describes in marketing materials. The description states that “the strategy is based on eight proven fundamental and technical factors, including well-known factors such as value and momentum as well as certain proprietary factors that have been back-tested. The strategy includes a dynamic weighting component to adjust the amount allocated to each factor based on prevailing market conditions.” The materials also highlight risks such as “the possibility that the model or its underlying factors may not work out of sample,” and “because the weight placed on various factors is dynamic, it may not be suitable for clients who seek steady exposure to certain factors.” One of Somer's clients agrees to use this strategy. When preparing the first performance report for this client, Somer discovers a coding error that reversed the client's weightings assigned to the value and momentum factors. Prior to joining Karibe, Somer purchased shares in a small-cap technology firm for his personal portfolio. When he started his new role Somers disclosed the position, which had quadrupled in value since the initial purchase and represented more than 5\% of his personal holdings. He had no intention to sell the shares and he recommended them to clients at Karibe, to whom he disclosed his ownership. After the successful launch of a new product resulted in additional large gains in the shares, Somer now recommends that clients place limit orders when purchasing the shares. Though he remains bullish on the stock he is concerned about the size of his personal position, which is now more than 15\% of his portfolio. One of his clients recently placed a limit order at $50 per share, which represents the highest bid in the market. The lowest offer is $52. Somer considers filling the client's order with some of his own shares at the $50 bid price. Question:If he fills the client's order for shares of the technology firm, would Somer violate the standard related to priority of transactions? Choices: A: No, B: Yes, because the client would be disadvantaged by the trade, C: Yes, because he would benefit personally from a trade undertaken for a client.

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:For which portfolio is the spread duration likely to be closest to the modified duration?; Answer Choices: A: Portfolio 1, B: Portfolio 2, C: Portfolio 3. Answer:

A

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:For which portfolio is the spread duration likely to be closest to the modified duration?; Answer Choices: A: Portfolio 1, B: Portfolio 2, C: Portfolio 3. Answer:

Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations. Question:For which portfolio is the spread duration likely to be closest to the modified duration? Choices: A: Portfolio 1, B: Portfolio 2, C: Portfolio 3.

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:The expected 6-month excess return for Bond A is closest to:; Answer Choices: A: -0.05%., B: 0.25%., C: 0.65%.. Answer:

B

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:The expected 6-month excess return for Bond A is closest to:; Answer Choices: A: -0.05%., B: 0.25%., C: 0.65%.. Answer:

Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations. Question:The expected 6-month excess return for Bond A is closest to: Choices: A: -0.05%., B: 0.25%., C: 0.65%..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:Which high-yield credit market in Exhibit 2 would be expected to perform best in the near term?; Answer Choices: A: Market 1, B: Market 2, C: Market 3. Answer:

C

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:Which high-yield credit market in Exhibit 2 would be expected to perform best in the near term?; Answer Choices: A: Market 1, B: Market 2, C: Market 3. Answer:

Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations. Question:Which high-yield credit market in Exhibit 2 would be expected to perform best in the near term? Choices: A: Market 1, B: Market 2, C: Market 3.

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:Which of the following structured financial instruments would best address the preferences of Apollo's client?; Answer Choices: A: Covered bonds, B: Asset-backed securities, C: Collateralized debt obligations. Answer:

A

sample_test

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations.; Question:Which of the following structured financial instruments would best address the preferences of Apollo's client?; Answer Choices: A: Covered bonds, B: Asset-backed securities, C: Collateralized debt obligations. Answer:

Scenario: TOPIC: FIXED INCOME TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS Alexander Apollo manages bond portfolios for high-net-worth clients. He is reviewing the corporate bond holdings in the following three portfolios: Portfolio 1: Investment-grade, non-callable, fixed-rate bonds Portfolio 2: Investment-grade, floating-rate bonds Portfolio 3: High-yield bonds with diversified call and coupon features Apollo calculates the expected 6-month excess return for corporate Bond A using information from Exhibit 1. He assumes the current spread duration will not change. |Exhibit 1| |Current OAS|120 bps| |Expected OAS in 6 months|130 bps| |Expected annual credit loss|0.30%| |Spread duration|2.0| Apollo invests globally in the high-yield credit markets. He can hedge clients' foreign exchange exposure into their domestic currency at minimal cost. He compares the credit markets shown in Exhibit 2 to evaluate expected performance in a near-term bullish global environment. |Exhibit 2| |Market 1||Market 2|Market 3| |Credit quality of outstanding high-yield bonds||High concentration of CCC-rated bonds| High concentration of BB-rated bonds|High concentration of CCC-rated bonds| |Expected supply of newly issued high-yield bonds|High|Low|Low| One of Apollo's clients prefers to invest in a structured product that offers exposure to financial sector debt and has more than one source of credit protection. He evaluates the appropriateness of the following three structured financial instruments: covered bonds, assetbacked securities, and collateralized debt obligations. Question:Which of the following structured financial instruments would best address the preferences of Apollo's client? Choices: A: Covered bonds, B: Asset-backed securities, C: Collateralized debt obligations.

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:To comply with CFA Institute Standards, when invited to attend the all-expenses paid seminar as a guest of Randolph Enterprises, McDougal should:; Answer Choices: A: not attend the seminar, B: accept Randolph's offer, C: decline Randolph's offer and attend the seminar as originally planned.. Answer:

C

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:To comply with CFA Institute Standards, when invited to attend the all-expenses paid seminar as a guest of Randolph Enterprises, McDougal should:; Answer Choices: A: not attend the seminar, B: accept Randolph's offer, C: decline Randolph's offer and attend the seminar as originally planned.. Answer:

Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. Question:To comply with CFA Institute Standards, when invited to attend the all-expenses paid seminar as a guest of Randolph Enterprises, McDougal should: Choices: A: not attend the seminar, B: accept Randolph's offer, C: decline Randolph's offer and attend the seminar as originally planned..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:To comply with CFA Institute Standards, McDougal's responsibility regarding Turkell's offer in Statement 1 is to:; Answer Choices: A: receive permission from the CFA Institute before she accepts the assignment., B: accept the assignment as there is no conflict of interest., C: obtain the employer's permission before accepting the referral fee arrangement.. Answer:

C

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:To comply with CFA Institute Standards, McDougal's responsibility regarding Turkell's offer in Statement 1 is to:; Answer Choices: A: receive permission from the CFA Institute before she accepts the assignment., B: accept the assignment as there is no conflict of interest., C: obtain the employer's permission before accepting the referral fee arrangement.. Answer:

Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. Question:To comply with CFA Institute Standards, McDougal's responsibility regarding Turkell's offer in Statement 1 is to: Choices: A: receive permission from the CFA Institute before she accepts the assignment., B: accept the assignment as there is no conflict of interest., C: obtain the employer's permission before accepting the referral fee arrangement..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:Did McDougal violate CFA Institute Standards when she changed her recommendation on Randolph Enterprises from a buy to a sell based on the conversations she overheard at the seminar?; Answer Choices: A: No., B: Yes, because she did not disclose that some of the analysis was opinion., C: Yes, because she did not have a reasonable basis for her recommendation.. Answer:

C

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:Did McDougal violate CFA Institute Standards when she changed her recommendation on Randolph Enterprises from a buy to a sell based on the conversations she overheard at the seminar?; Answer Choices: A: No., B: Yes, because she did not disclose that some of the analysis was opinion., C: Yes, because she did not have a reasonable basis for her recommendation.. Answer:

Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. Question:Did McDougal violate CFA Institute Standards when she changed her recommendation on Randolph Enterprises from a buy to a sell based on the conversations she overheard at the seminar? Choices: A: No., B: Yes, because she did not disclose that some of the analysis was opinion., C: Yes, because she did not have a reasonable basis for her recommendation..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:The portfolio managers who traded Randolph Enterprises based on the content of McDougal's report most likely violated which Standards?; Answer Choices: A: Fair Dealing., B: Priority of Transactions., C: Diligence and Reasonable Basis.. Answer:

A

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:The portfolio managers who traded Randolph Enterprises based on the content of McDougal's report most likely violated which Standards?; Answer Choices: A: Fair Dealing., B: Priority of Transactions., C: Diligence and Reasonable Basis.. Answer:

Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. Question:The portfolio managers who traded Randolph Enterprises based on the content of McDougal's report most likely violated which Standards? Choices: A: Fair Dealing., B: Priority of Transactions., C: Diligence and Reasonable Basis..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:The purpose of Standard VI(C) Referral Fees is to help clients:; Answer Choices: A: evaluate the transparency of the compliance system., B: assess any conflicts of interest the fees may cause and evaluate the transparency of the compliance system., C: assess any conflicts of interest the fees may cause and evaluate the full cost of the services.. Answer:

C

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:The purpose of Standard VI(C) Referral Fees is to help clients:; Answer Choices: A: evaluate the transparency of the compliance system., B: assess any conflicts of interest the fees may cause and evaluate the transparency of the compliance system., C: assess any conflicts of interest the fees may cause and evaluate the full cost of the services.. Answer:

Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. Question:The purpose of Standard VI(C) Referral Fees is to help clients: Choices: A: evaluate the transparency of the compliance system., B: assess any conflicts of interest the fees may cause and evaluate the transparency of the compliance system., C: assess any conflicts of interest the fees may cause and evaluate the full cost of the services..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:If McDougal is found to be in serious violation of the Code and Standards and is sanctioned by the CFA Institute, she can be penalized by:; Answer Choices: A: a monetary fine., B: a monetary fine and/or private censure., C: private censure and/or suspension.. Answer:

C

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. ; Question:If McDougal is found to be in serious violation of the Code and Standards and is sanctioned by the CFA Institute, she can be penalized by:; Answer Choices: A: a monetary fine., B: a monetary fine and/or private censure., C: private censure and/or suspension.. Answer:

Scenario: Ruth McDougal, CFA, is a vice president of research with Cratter Finance, which covers the healthcare and medical device industry and specializes in research and valuation services. One of the companies McDougal follows, Randolph Enterprises, has developed a new treatment for a brain disorder associated with memory loss. The treatment has been in late-stage clinical trials for the last year. The majority of analysts who follow Randolph Enterprises believe that the new treatment, which uses a proprietary drug, will be successful. This consensus has caused the stock price of Randolph Enterprises to trade at a historical high. McDougal agrees with the prevailing sentiment, resulting in a strong buy recommendation on the company. McDougal plans to attend an industry seminar sponsored by the Institute on Aging. Randolph Industries invites her to attend as its guest with all expenses paid by Randolph. At the seminar, McDougal noted that the CEO of Turkell-Young, a public company and a major competitor of Randolph, is in attendance. While McDougal was familiar with Turkell-Young, it was not one of the firms that she actively covers. McDougal was introduced to Jay Turkell, the CEO of Turkell-Young. Turkell tells her that he was aggressively seeking acquisitions and offers to pay McDougal a referral fee for any recommendations she made that resulted in an acquisition for Turkell-Young. At a seminar gathering, McDougal overheard some attendees at another table mention that the results of the late-stage clinical trial for Randolph Enterprises, although not yet public, were disappointing. McDougal knew that if this news became public, Randolph Enterprises' stock price would fall, and Randolph Enterprises would then become a potential acquisition target for Turkell-Young. When McDougal returns to the office, she completes a research report on Randolph Enterprises that summarized the information she gathered at the seminar. She recommends that investors sell Randolph Enterprises shares and supports her conclusion with her opinion that too much value has been attributed to the outcome of the clinical trial for the new proprietary drug. McDougal circulates the Randolph Enterprises report internally for review. Upon reading the Randolph Enterprises draft report, two portfolio managers cancel their buy orders on Randolph Enterprises on behalf of important Cratter Finance clients. Later, McDougal's report on Randolph Enterprises is released to Cratter Finance's clients. The following day, it is publicly reported that Randolph Enterprises' late-stage clinical trial is not meeting expectations. McDougal's report is picked up in the press. The CEO of Turkell-Young calls McDougal and congratulates her on her work. Turkell asks if Turkell-Young could engage Cratter Finance for a special assignment to do a more in-depth analysis on Randolph Enterprises. Turkell says he is trying to assess the potential synergies Turkell-Young might have with Randolph Enterprises. Turkell executes an engagement letter with McDougal, who says she will complete the analysis in the next few weeks. Turkell-Young's engagement letter with Cratter Finance stipulates that if Turkell-Young acquires Randolph Enterprises based on McDougal's analysis, a referral fee will be paid directly to McDougal. McDougal is concerned about revealing the referral fee that she could receive from Turkell-Young to her supervisor. Cratter Finance might assume that her recent buy recommendation on Turkell-Young was biased. McDougal decides to remain silent about the arrangement. McDougal justifies her actions as she does not want her colleagues to doubt her independence and objectivity. Question:If McDougal is found to be in serious violation of the Code and Standards and is sanctioned by the CFA Institute, she can be penalized by: Choices: A: a monetary fine., B: a monetary fine and/or private censure., C: private censure and/or suspension..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Do the statements made by Ariusu and Tami comply with CFA Institute Standards?; Answer Choices: A: Yes., B: No, Statement 1 is not compliant., C: No, Statement 2 is not compliant.. Answer:

A

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Do the statements made by Ariusu and Tami comply with CFA Institute Standards?; Answer Choices: A: Yes., B: No, Statement 1 is not compliant., C: No, Statement 2 is not compliant.. Answer:

Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. Question:Do the statements made by Ariusu and Tami comply with CFA Institute Standards? Choices: A: Yes., B: No, Statement 1 is not compliant., C: No, Statement 2 is not compliant..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Does Ariusu's calculation of the real estate investment group's performance since the inception of the fund comply with CFA Institute Standards?; Answer Choices: A: Yes., B: No; ignoring the lower performance since Ariusu's arrival does not provide a fair and complete presentation of investment performance., C: No; it would be considered false and misleading not to provide the risk-adjusted performance results since Ariusu's arrival.. Answer:

A

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Does Ariusu's calculation of the real estate investment group's performance since the inception of the fund comply with CFA Institute Standards?; Answer Choices: A: Yes., B: No; ignoring the lower performance since Ariusu's arrival does not provide a fair and complete presentation of investment performance., C: No; it would be considered false and misleading not to provide the risk-adjusted performance results since Ariusu's arrival.. Answer:

Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. Question:Does Ariusu's calculation of the real estate investment group's performance since the inception of the fund comply with CFA Institute Standards? Choices: A: Yes., B: No; ignoring the lower performance since Ariusu's arrival does not provide a fair and complete presentation of investment performance., C: No; it would be considered false and misleading not to provide the risk-adjusted performance results since Ariusu's arrival..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Was Ariusu's presentation to Wheeler of the real estate fund's simulated investment returns in compliance with CFA Institute Standards?; Answer Choices: A: Yes., B: No, because reporting simulated returns does not provide a fair and complete presentation of performance information., C: No; CFA Institute Standards allow for simulated investment results only if the simulation is applied retroactively to investment performance.. Answer:

B

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Was Ariusu's presentation to Wheeler of the real estate fund's simulated investment returns in compliance with CFA Institute Standards?; Answer Choices: A: Yes., B: No, because reporting simulated returns does not provide a fair and complete presentation of performance information., C: No; CFA Institute Standards allow for simulated investment results only if the simulation is applied retroactively to investment performance.. Answer:

Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. Question:Was Ariusu's presentation to Wheeler of the real estate fund's simulated investment returns in compliance with CFA Institute Standards? Choices: A: Yes., B: No, because reporting simulated returns does not provide a fair and complete presentation of performance information., C: No; CFA Institute Standards allow for simulated investment results only if the simulation is applied retroactively to investment performance..

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Is Ariusu's use of real estate performance data in his discussion with Wheeler in compliance with CFA Institute Standards?; Answer Choices: A: No., B: Yes, because Wheeler received permission from Tami to use the information., C: Yes, because CFA Institute Standards allow for knowledge gained at one employer to be used in discussions with other firms.. Answer:

A

2020 Mock PM

Carefully read the scenario provided and the subsequent question. Your task is to analyze the scenario and select the most appropriate answer from the options A, B and C. Please respond with the exact answer, A, B or C only. Do not be verbose or provide extra information. Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. ; Question:Is Ariusu's use of real estate performance data in his discussion with Wheeler in compliance with CFA Institute Standards?; Answer Choices: A: No., B: Yes, because Wheeler received permission from Tami to use the information., C: Yes, because CFA Institute Standards allow for knowledge gained at one employer to be used in discussions with other firms.. Answer:

Scenario: Rejie Ariusu recently passed Level II of the CFA exam. His firm, Scrimm Capital, is an asset manager for several closed-end, pooled investment funds for institutional investors. Ariusu works in the real estate investment division, identifying real estate investment opportunities that are presented to Scrimm Capital's real estate investment committee for approval. Other groups within the firm include a high-yield loan group and a small-cap equity growth fund. Scrimm Capital was founded in 2010. All three funds were established and started trading in that year. Ariusu joined the firm in 2013. Lahi Tami is the supervisor of the real estate investment group. Tami championed the adoption of the Global Investment Performance Standards (GIPS) for the real estate group, which promotes its adherence to GIPS in its marketing materials. Ariusu made the following statement to Tami: Statement 1: Scrimm Capital cannot claim compliance with GIPS standards for only certain asset classes that fall within the definition of the firm. Tami replied: Statement 2: The real estate investment group claims GIPS compliance because it is a distinct business entity. Tami requests the returns for each investment fund as of December 31, 2019, for an upcoming request for proposals from a large public pension plan. Ariusu calculates the investment performance of the real estate group and determines that the performance results are better when calculated over the lifetime of the fund (since 2010) than when calculated since his arrival to the group in 2013. Ariusu is concerned that the performance of the real estate investment group has declined since he joined the firm, and due to this, elects to report the performance of the real estate investment group since the fund's inception. At a professional networking event, Ariusu discusses the investment environment with Vert Wheeler of Pam Capital, an asset management firm in the same city as Scrimm. Ariusu describes to Wheeler the performance of the Scrimm real estate fund using investments he recommended, but not approved by the real estate investment committee. Wheeler does not know that the investment performance described by Ariusu is simulated. Wheeler is interested in Ariusu's investment ideas and invites him to share his work over dinner, where Ariusu shares the simulated investment returns for the Scrimm Capital real estate fund. Ariusu states that the real estate portfolio can be easily replicated by Pam Capital, showing Wheeler all of the investment positions held by the real estate fund, including those Ariusu recommended, but were not approved. Wheeler calls Tami the following day to propose a potential joint marketing opportunity, and to discuss his previous night's dinner conversation with Ariusu. Wheeler does not want to interfere with Pam Capital and asks for Tami's permission to use the investment information provided by Ariusu as a way to market the real estate investment vehicle to existing investors of Pam Capital with the potential for them to invest with Scrimm Capital. Tami tells Wheeler that Scrimm will pay a solicitation fee for each new investor Wheeler brings. Since Tami is eager to attract new investors, she agrees to share the investment performance information with Wheeler. Question:Is Ariusu's use of real estate performance data in his discussion with Wheeler in compliance with CFA Institute Standards? Choices: A: No., B: Yes, because Wheeler received permission from Tami to use the information., C: Yes, because CFA Institute Standards allow for knowledge gained at one employer to be used in discussions with other firms..