Question #27
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: 11
Status: Correct
Correct Answer: A
Question
Sharon West is a CFA charterholder and trust officer for REO Trust Company. Soon after beginning work for REO, West finds that REO has been conducting all its securities transactions through her brother who is a registered representative. West's brother charges REO commissions that are equal to the lowest available from another broker. West's brother tells her that if she continues doing business with him, he will give her a substantial discount on all personal transactions she conducts through him. West:
Answer Choices:
A. must reject the arrangement
Explanation
Members are required to disclose to their employer in writing all monetary compensation
or other benefit they receive from clients or third parties in addition to the employer's
compensation, and obtain the employer's permission for such arrangements.
(Module 42.7, LOS 42: IV(B))