Ethical And Professional Standards - Ethical And Professional Standards Section 1
- A
stay abreast of changes in the client‟s net worth and accordingly update the investment policy to reflect changes in investment objectives.
- B
consider the long term aspect of Morales‟ investments and continue with the current strategy.
- C
keep changing the asset allocations in line with market changes.
- Option : B
- Explanation : According to Standard III(A) Loyalty the client needs to be informed with the updated result of the underperformance of his account. Withholding information is not in the best interest of the client.
- Option : A
- Explanation : Ludwig must disclose to his clients the change in the process of selection. Refer to Standard V(B) Communications with Clients and Prospective Clients
- A
adjust the non-cash compensation in the salaries of the personnel including Daisuke who are referring clients to the brokerage department.
- B
disclose to clients at the time of a referral, the referral arrangements within Advile‟s departments.
- C
stop the referral policy to remove any conflicts of interest.
- Option : B
- Explanation : Disclosure to clients is important even if the referrals result in a non-cash compensation. Refer to Standard VI(C) Referral Fees.
- Option : C
- Explanation : Refer to Standard VII(A) Conduct as Participants in CFA Institute Programs.
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