CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

Lindy Pok is an analyst at a brokerage house. Lindy is in the process of writing a research report on GHL. Which of the following situations represent a conflict of interest in terms of the Standards of Professional Conduct?

I. Lindy does part-time work for GHL.
II. Lindy's husband holds 10% of the equity of GHL.
III. Lindy's firm has a large financial interest in GHL.
IV. Lindy's mother supplies flowers to GHL for their special occasions.
A. II and III only
B. I, II and III only
C. II, III and IV only
Explanation: A member must disclose all his interests and possible conflicts to his clients and prospective clients. This would include:
  • material share ownership
  • market making activities
  • corporate finance relationships
  • directorships
The fact that Lindy's mother supplies flowers to GHL for their special occasions is unlikely to result in a conflict of interest.

User Contributed Comments 4

User Comment
damianpd How does working part-time represent a conflict of interest?
jae1884 Some part-time employees may also have benefits that may be of conflict of interest
gfenney There is nothing that states the part-time work is as a director.
guest The standard for conflicts of interest is more general requiring that members disclose all matters that reasonably could be expected to impair the members' or candidates objectivity. Working part time for the subject company is implied here.
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