CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

Thomas, a CFA charterholder, manages small-cap portfolios for institutional clients. Thomas is convinced, given the deteriorating economic conditions, that as a group small-cap equities will underperform during the next 12-24 months. To preserve his clients' wealth, he sells the small-cap equities that he considers most vulnerable to price declines. After considerable research, Thomas buys large-cap equities that he believes are better positioned to weather the expected economic downturn. Thomas provides complete disclosure of these trades to his clients after the purchase. Has Thomas violated any CFA Institute Standards of Professional Conduct?
A. Yes, relating to misconduct
B. Yes, relating to suitability
C. No
Explanation: Members who are responsible for managing a portfolio to a specific mandate, strategy, or style must only make investment recommendations or take investment actions that are consistent with the stated objectives and constraints of the portfolio.

User Contributed Comments 1

User Comment
trugunna Is Thomas androgynous?
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