Question #55
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: 27
Status: Incorrect
Correct Answer: B
Your Answer: A
Question
The Konkol Company implements a new methodology for portfolio valuation that is licensed to them by ABC Statistics. To comply with the Code and standards, Konkol should:
Answer Choices:
A. discuss the new methodology only with clients whose security selection process will change as a result
B. discuss the new methodology with its clients
C. not discuss the new methodology with clients because doing so would fail to preserve ABC’s confidentiality
Explanation
Standard V(B) Communication with Clients and Prospective Clients requires any change in
the scope, valuation methodology, or focus of the portfolio to be discussed with clients.
No information is given that would suggest the methodology is confidential.
(Module 42.8, LOS 42: V(B))