CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

Adam Ames, CFA, purchased at varying prices during the trading session a large block of stock on behalf of specific accounts he managed. The stock realized a significant gain in value before the close of the trading day, so Ames reviewed his purchase prices to determine what prices should be assigned to each specific account. According to the Standards of Practice Handbook, Ames's most appropriate action is to allocate the execution prices ______.
A. on a weighted basis according to the size of the clients' accounts
B. by giving longer-term clients more favorable prices
C. to all clients within the block trade at the same execution price
Explanation: Members have a responsibility to deal with all clients fairly. All clients participating in the block trade should receive the same execution price and be charged the same commission.

User Contributed Comments 0

You need to log in first to add your comment.