Question #16 - Reading 42.4 Standards of Professional Conduct Guidance for Standards IV

Reading: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV

PDF File: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV.pdf

Page: 7

Status: Incorrect

Correct Answer: B

Your Answer: B

Shared Context

- Which of the following standards is most likely violated in Lindquist's use of his experimental version of the Midwestern model? A) Standard I(C): Misrepresentation (plagiarism). B) Standard V(A): Diligence and Reasonable Basis. C) Standard IV(C): Responsibilities of Supervisors.

Question

Lindquist's actions in advertising his investment performance:

Answer Choices:

A. conform to standards concerning performance presentation as long as Lindquist does not claim compliance with CFA Institute Global Investment Performance Standards

B. violate Standard III(D): Performance Presentation

C. conform to all standards

Explanation

Lindquist failed to conform to Standard III(D) by releasing misleading information concerning his historical performance at Midwestern. KMGR may use a different management style than Midwestern, rendering historical performance of little value to Midwestern clients. Claiming compliance with CFA Institute GIPS would only compound the problem. Misrepresenting performance results as occurring at one firm when they actually occurred at a previous employer is a violation of the presentation standards. (Module 42.7, LOS 42: IV(B))

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