CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

Jamie Smith works for AMC Brokerage. He is in the process of releasing a research report on an advertising company called PLW. He recommends that his clients buy shares. Which of the following statements may result in a conflict or possible conflict situation?

I. Jamie's mother has a material shareholding in PLW.
II. Jamie does private work for PLW.
III. Jamie's sister supplies the coffee to PLW.
IV. AMC Brokerage has a large holding in PLW.
A. I, II, IV only
B. I and IV only
C. II 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
Jamie's mother, with her large shareholding, will be included, as this could lead to a possible conflict. The fact that Jamie's sister supplies the coffee to PLW is unlikely to result in a conflict of interest.

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