Question #28
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: 12
Status: Incorrect
Correct Answer: A
Your Answer: C
Question
Brian Bellow, CFA, is a portfolio manager for Progressive Trust Company. Several friends have asked Bellow to review their investment portfolios. On his own time, Bellow examines their portfolios and makes several recommendations. He accepts no compensation from his friends for his investment advice. According to CFA Institute Standards of Professional Conduct, did Bellow violate his duty to Progressive Trust?
Answer Choices:
A. No, because Bellow received no compensation for his services
B. Yes, because Bellow did not attempt to solicit his friends to become clients of his employer
C. No, because Bellow provided no ongoing investment advice
Explanation
Standard IV(A) Loyalty requires members and candidates to disclose to their employers
any independent practice for compensation. In this case, Bellow did not receive any
compensation for his advice and therefore did not engage in independent practice.
(Module 42.7, LOS 42: IV(A))