CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

An investment manager only has a small block of shares from a "hot" IPO. What is the best way for him to allocate this block according to the Standards of Professional Conduct on Fair Dealing?
A. Allocate these shares pro-rata to all client portfolios for whom the issue is appropriate.
B. Allocate a large portion of the shares to institutional clients and a small share to the individual clients.
C. Allocate all the shares to the firm's institutional clients.
Explanation: Regarding an issue that is oversubscribed or a "hot" IPO, all clients should be given a pro rata share of the over-subscription. The member himself should not take up the issue, in order to free up some of the oversubscribed shares.

User Contributed Comments 1

User Comment
gyee2012 III Duties to Clients
B. Fair Dealing - fairness to all accounts
- analysis, investment recc, invest actions, prof activities
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