Question #6 - Reading 42.2 Standards of Professional Conduct Guidance for Standards II

Reading: Reading 42.2 Standards of Professional Conduct Guidance for Standards II

PDF File: Reading 42.2 Standards of Professional Conduct Guidance for Standards II.pdf

Page: 3

Status: Incorrect

Correct Answer: A

Your Answer: B

Shared Context

- Regarding Myers' references of her status as a candidate in the CFA program, what Standard governs these actions and is she in compliance? A) Standard VII: Responsibilities as a CFA Member or CFA Candidate. Compliance: No. B) Standard I: Professionalism. Compliance: No. C) Standard III: Duties to Clients. Compliance: No.

Question

All of the following most likely apply to Myers' participation as a partner in the software company EXCEPT:

Answer Choices:

A. - Disclosure of Conflicts

B. Standard VI(

C. Standard III(E) - Preservation of Confidentiality

Explanation

Standard VI(B)—Priority of Transactions most likely does not apply to Myers' participation in the software company. Standard VI(B) covers priority over transactions in securities or other investments for clients and employers to prevent any instances of "front-running" for the benefit of the member. Myers' software business is not transaction-oriented, and there is no information that describes any instances of the software company having priority in securities transactions over Ironclad or its clients. Preservation of confidentiality of clients is relevant here if she passes on their information in her capacity as a partner in the software firm. Disclosure of conflict of interest to her employer may be applicable so that the employer can ascertain that clients of the software company are not getting preferential treatment. (Module 42.3, LOS 42: II(A))

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