Ethics Quiz 4

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Joined: Tue Feb 16, 2016 5:34 pm

Ethics Quiz 4

Postby paragagrawal560 » Wed Oct 05, 2016 11:45 pm

Good morning sir,
This is Parag Agrawal preparing for CFA Level-1 (December 2016 attempt). I was giving quiz-4 of ethics and I have a doubt in following questions:

1. Pratik Jain, CFA is an independent director for Sulzex Pumps and at the director’s meeting; he comes to know that company is funding campaign of one of the political party. Jain checks with firm’s legal counsel and comes to conclusion that party is involved in illegal activity. At the next board meeting Jain discusses his concerns and urges board to disclose this fact to shareholders, but board of directors refused this idea of Mr Jain. Which of the following should be the most likely course of action for Mr Jain?
Choose one answer.
a. He should express his concerns to board of directors in written Incorrect
b. He should inform his discomfort to his supervisor and try to disassociate himself Incorrect
c. He should resign from the board and seek legal counsel for disclosure requirement Correct
The correct answer is C.
Member should dissociate himself from any of the activities which are of illegal in nature and should seek legal advice to decide the future course of action.

I marked option B as I have studied in most of the examples that disassociating yourself is a better option than resigning.

2.After receiving CFA charter, a charterholder does not pays his membership fees and does not file completed professional conduct statement and he displays “CFA” after his name in his business card. By doing so the charter holder has most likely:
Choose one answer.
a. Not violated any code and standards Incorrect
b. Violated the standard as he cannot display “CFA” in his business card. Incorrect
c. Violated the standard by not paying his dues and not filing completed professional conduct statement. Correct
The correct answer is C.
The charterholder has violated the standard by not paying his dues and not filing completed professional conduct statement.

I've selected option B, as per to my knowledge not paying membership fees and not filling completed conduct statement is not a violation instead by not doing so and still using CFA as in business card is a violation.
Please correct me I'm wrong.


Finance Junkie
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Re: Ethics Quiz 4

Postby edupristine » Thu Oct 20, 2016 4:52 am

Hi Parag

Option B is the correct Answer.

Return to “CFA Level I”


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