Test Prep CFA® Level I Chartered Financial Analyst CFA-Level-I Dumps in PDF

Free Test Prep CFA-Level-I Real Questions (page: 6)

Each ________ needs to comprise portfolios or asset classes that represent a similar investment goal.

  1. return
  2. composite
  3. value
  4. benchmark
  5. mix

Answer(s): B

Explanation:

All actual fee-paying discretionary portfolios must be included in at least one composite defined according to similar strategy or investment objective.



ERISA fiduciaries must adhere to the following prudent procedures:

- establish a written investment policy for the plan
- diversify plan assets
- make investment decisions with the skill and care of a ________
- monitor investment performance
- control investment expenses
- avoid prohibited transactions

  1. member
  2. supervisor
  3. prudent expert
  4. none of these answers
  5. trader

Answer(s): C

Explanation:

These procedures are stipulated under the detailing of ERISA fiduciary duties, to ensure that the fiduciary complies with the duty to act with prudence. Under ERISA, the fiduciary is held to a higher standard than the Prudent Man Rule. The ERISA fiduciary needs to be as prudent as the average expert, not simply as prudent as the average person.



________ establishes the fiduciary principles for U.S. corporate pension plans.

  1. AIMR
  2. PSPC
  3. ERISA
  4. WTO
  5. UMIFA
  6. None of these answers
  7. RELAC

Answer(s): C

Explanation:

ERISA establishes the fiduciary principles for U.S. corporate pension plans. ERISA is very specific in its definition of fiduciaries and their responsibilities and investment managers of U.S. corporate pension plans are subject to ERISA's fiduciary provisions.



Under what conditions is Standard II (B)- Professional Misconduct violated?

  1. The member is convicted of a misdemeanor.
    II. The member regularly engages in unprofessional but legal behavior.
    III. The member engages in dishonest activities that do not result in criminal conviction.
    IV. The member is convicted of a felony.
  2. II, III & IV.
  3. I, II & IV.
  4. I, II, III & IV.
  5. IV only.

Answer(s): A

Explanation:

This question pertains to Standard II (B) - Professional Misconduct. A misdemeanor conviction is only considered grounds for a violation of II (B) if it occurs repeatedly, or involves "moral turpitude" (lying, cheating, stealing, or other dishonest conduct). Unprofessional and dishonest behavior or a felony conviction are violations of Standard II (B).



Complete the following: According to The Code of Ethics, members of AIMR shall: "Act with ________, competence, dignity and in an ethical manner when dealing with the public, clients, prospects, employers, employees and fellow members."

  1. virtue
  2. none of these answers
  3. honorability
  4. integrity
  5. morality

Answer(s): D

Explanation:

According to The Code of Ethics, members of AIMR shall: "Act with integrity, competence, dignity and in an ethical manner when dealing with the public, clients, prospects, employers, employees and fellow members."



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