Question #44 - 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: 23

Status: Incorrect

Correct Answer: B

Your Answer: B

Shared Context

- The production of the advertising represented a violation of: A) Standard IV(A): Loyalty to Employer and Standard I(C): Misrepresentation. B) Standard IV(C):Responsibilities of Supervisors, but not Standard VII(B): Reference to CFA Institute, the CFA Designation, and the CFA Program. C) Standard VII(B): Reference to CFA Institute, the CFA Designation, and the CFA Program, and Standard I(C): Misrepresentation.

Question

Ferrazzo may use which of the following brokers?

Answer Choices:

A. Blue and Green only

B. White and Blue only

C. Blue only

Explanation

The CFA Institute Soft Dollar Standards dictate members must always seek best price and execution. Soft-dollar arrangements must provide a benefit to clients, be disclosed, and be reasonable in relation to the research and execution services provided. Because both White and Blue provide best price and execution, it is within Ferrazzo's discretion to pay more for White's services as long as the research benefit is reasonable. Both White and Blue may be used. (Module 42.8, LOS 42: V(A))

Actions

Practice Flashcards