Question #15 - Reading 42.5 Standards of Professional Conduct Guidance for Standards V

Reading: Reading 42.5 Standards of Professional Conduct Guidance for Standards V

PDF File: Reading 42.5 Standards of Professional Conduct Guidance for Standards V.pdf

Page: 9

Status: Unattempted

Correct Answer: A

Shared Context

- With regard to his coverage of HighLife stock, Singh: A) did not violate the Standards for reasonable basis or research reports. B) violated the research reports Standard because he failed to differentiate between facts and opinions. C) violated the reasonable basis Standard by downgrading a stock because it missed one quarterly earnings estimate.

Question

Which of the following trade allocation procedures being considered for Horizon's trade allocation policy would NOT be consistent with Standard III(B)—Fair Dealing?

Answer Choices:

A. Regular orders are processed and executed on a pro-rata basis

Explanation

All orders should be allocated on a pro rata basis based on order size, not on a first-in, first-out basis. The other regulations satisfy the fair-dealing Standard.

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