CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

A member who is an investment manager is most likely to breach his duty to clients by ______.
A. using client brokerage to purchase goods or services that are used in the investment decision-making process
B. disclosing confidential client information to the CFA Institute Professional Conduct Program
C. consistently supporting management's recommendations by voting with management on proxies related to non-routine governance issues
Explanation: Members are allowed to use client brokerage to purchase goods or services that are used in the investment decision-making process, as the manager is not collecting undisclosed soft commissions and hence the purchase of goods or services used in the investment decision-making process does not present a potential conflict of interest.

User Contributed Comments 4

User Comment
rana1970 B: he can disclose info to PCP without any violation.
schweitzdm Which one could more easily lead to a violation?

Disclosing stuff to PCP program, you will probably disclose info that isn't related to the case but you're a diligent CFA charterholder and make sure you're thorough with your disclosure to PCP. You give them the name of your client's dog even though you shouldn't have.

Thing is, with A, you have to ensure that your client is aware that soft dollars are being spent.
Dilaraj A is not completely right, because if you use client brokerage which is generated by one client, but benefits the othe client, then you might be breaching the standard.
ctschro CFA curriculum is quite clear about PCP virtually being an extension of self, so there is almost no possibility of violating confidentiality with them.
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