Question #34 - 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: 18

Status: Correct

Correct Answer: B

Question

In order to remain in compliance when managing private client accounts, members must do all of the following EXCEPT:

Answer Choices:

A. Seek authorization for changes in investment policy

B. Conduct regular reviews of client circumstances

C. Use a risk-factor model to assess the client's risk tolerance

Explanation

There is no requirement to use a specific model in order to assess and document a client's risk tolerance. Risk tolerance is more likely to be addressed implicitly in the asset allocation guidelines that are established and updated based upon client circumstances. (Module 42.8, LOS 42: V(B))

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