CFA Practice Question

CFA Practice Question

TPT securities uses stock picking strategy that has generated simulated returns of 4% or more over the market during the last 10 years. Connor Anderson Of TPT Securities while making a presentation to prospective clients makes the following statements: If you invest in TPT you should expect to receive at least 3% more than the market return every year, and the stock picking strategy used by TPT generated a return of 4% or more over the market during the last ten years.

Which of the following is a correct list of violations of the Standards?
A. The second statement violates performance presentation and the first statement doesn't violate Standards.
B. The first statement violates the restriction on misrepresentation and the second statement doesn't violate Standards.
C. The first statement violates the restriction on misrepresentation and the second statement violates performance presentation.
Explanation: The first statement violates I(C) - you cannot guarantee any future performance based on past performance, and the second statement violates III(D) - e.g., any risk considered?

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