CFA Practice Question
CFA Practice Question
Carly Shuttle manages money for a client and has over the past five years achieved a return greater than the benchmark. In appreciation the client gifts Carly an all expenses paid Monaco weekend. Carly believes that the gift does not create a conflict of interest and does not disclose the gift to her supervisor.
A. Carly has not violated Standards I (B) Independence and Objectivity if after using her judgment she feels the gift did not compromise her independence.
B. Carly has violated Standard I (B) Independence and Objectivity.
C. Carly has not violated the Standards.
Explanation: Needs to disclose gift to employer.
User Contributed Comments 5
|carreca||I am not sure about this one. Quite confused after some other questions, it appears to me that she has violated standard IV(B) Additional Compensation arrangements but not standard I(B). Indeed, gifts are given after the work performed so it did not compromise her independency.
|myronwu||The gift will impact his independence and judgenment in the future so it's not appropriate.|
|Clude||As long as a THIRD PARTY can reasonablly doubt the objectivity of the analyst due to "gift" "pmt for exp" "travel"..., the analyst is in violation.|
|dream007||I am not sure about this one either. Carly manages a clients money; Carly does well, and client rewards Carly. How does that impact her independence and objectivity? additional compensation perhaps, not disclosing to employer, YES. but independence?? hmmm|
|jjhigdon||I am positive I've encountered many questions that have stated as long as the gifts are disclosed, its ok. A money manager receiving a gift from a client as additional compensation for outstanding performance is ok as long as it does not to the detriment of his/her other clients. Its quite different if you are talking about a sell side analyst receiving gifts of course. This does indeed need to be disclosed, as the explanation says, so its a violation of IV.b Duty to Employerss - Additional Compensation Arrangements, but that's not what the question is asking! I call Shenannigans on this one.|