Test Prep CFA® Level I Chartered Financial Analyst CFA® LEVEL 1 Exam Questions in PDF

Free Test Prep CFA® LEVEL 1 Dumps Questions (page: 48)

Level ________ verification applies to specific composites.

  1. 0
  2. IV
  3. II
  4. I
  5. III

Answer(s): C

Explanation:

Level I verification applies to all firm composites. Level II verification requires a Level I verification at least on the specific composites being verified at Level II. (Note: There are only two levels of verification.)



Standard V (A), Prohibition against Use of Material Nonpublic Information, states that the test for determining if a tipper is breaching a fiduciary duty

  1. is whether the tippee benefits directly or indirectly from the disclosure.
  2. is whether the tipper benefits directly or indirectly from the disclosure.
  3. is whether the tipper benefits directly from the disclosure.
  4. is whether the insider benefits directly from the disclosure.
  5. none of these answers.

Answer(s): B

Explanation:

Standard V (A), Prohibition against Use of Material Nonpublic Information, states that the test for determining if a tipper is breaching a fiduciary duty is whether the tipper benefits directly or indirectly from the disclosure. The three types of personal benefits are: 1. pecuniary benefit, 2. a quid pro quo between the insider and recipient, and 3. a gift of confidential information to a relative. An insider who selectively discloses material nonpublic information without a legitimate business purpose may be found to have breached a fiduciary duty.



All of the following statements about a member's use of clients' brokerage commissions are true except

  1. client brokerage commissions may be directed to pay for the investment manager's operating expenses.
  2. client brokerage commissions should be commensurate with the value of the brokerage and research services received.
  3. client brokerage commissions may be used by the member to pay for securities research used in managing the client's portfolio.
  4. client brokerage commissions should be used by the member to ensure that fairness to the client is maintained.

Answer(s): A

Explanation:

This question deals with Standard IV (B.1), Fiduciary Duties and the specific topic of soft dollars. All the answers deal with the use of client brokerage commissions and the criteria for their use - (1) fairness to the client and (2) commensurate with the value of the services provided. The only statement that is not true is that client brokerage commissions may not be directed to pay the investment manager's operating expenses.



Standard III includes which of the following?

  1. None of these answers
  2. Use of Professional Designation
  3. Disclosure of Conflicts to Employer
  4. Fair Dealing
  5. Prohibition against Plagiarism
  6. All of these answers

Answer(s): C

Explanation:

Standard III deals with Obligation to Inform Employer of Code and Standards, Duty to Employer, Disclosure of Conflicts to Employer, Disclosure of Additional Compensation Arrangements and Responsibilities of Supervisors.



Which of the following persons does AIMR hold most accountable for fiduciary duties owed to clients?

  1. Investment Advisors
  2. Brokers
  3. None of these answers
  4. Dealers

Answer(s): C

Explanation:

AIMR's Code and Standards do not make distinctions among brokers, dealers and investment advisors when it comes to fiduciary duties toward customers. All members must comply with the conduct required of them by the Code and Standards or applicable law, whichever is higher.



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2/2/2024 6:17:08 PM

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8/13/2023 10:32:00 AM

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5/26/2023 6:21:00 PM

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12/4/2023 12:17:00 PM

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10/19/2023 7:09:00 PM

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11/23/2023 11:36:00 AM

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8/23/2023 12:52:00 AM

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12/12/2023 8:53:00 PM

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A
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11/7/2023 11:02:00 AM

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