CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

Susan Miller, CFA, works for an investment-counseling firm. James Sims, a new client of the firm, is meeting with Miller for the first time. Sims had used another counseling firm for financial advice for years, but has switched his account to Miller's firm. After a few minutes of "get-acquainted" small talk, Miller explains to Sims that she has discovered a highly undervalued stock that offers large potential gains. She recommends that he purchase the stock for his account. Miller has committed a violation of CFA Institute's Standards of Professional Conduct. What should she have done differently?
A. She should have thoroughly explained the characteristics of the company to Sims, including the characteristics of the industry in which the firm operates. She should also have explained her qualifications, including her education, training, experience, and the meaning of the CFA designation.
B. She should have questioned Sims on the reasons that he changed counseling firms. If the discovery process indicated that he had been treated unfairly at the other firm, Miller has a responsibility to notify CFA Institute of any violation.
C. She should have determined Sims' needs, objectives, and tolerance for risk before making a recommendation for any type of security.

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