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Professionalism

  • Knowledge of Law: Understand and comply with all applicable laws, rules, and regulations.
     
  • Independence & Objectivity: Use reasonable care and judgment to achieve and maintain independence and objectivity.
     
  • Misinterpretation: Do not make any misrepresentations knowingly.
     
  • Misconduct: Do not engage in any professional conduct involving dishonesty, fraud, or deceit.

Q:

Mr. Ritesh Shah, CFA works for Lehman Brothers and is responsible for covering automobile sector across Europe. One of the automobile company that he covers has arranged analyst meet in Monte Carlo, for which company has arranged presidential suite for Mr. Shah and dinner with F1 champion driver. Is Shah in violation of CFA standards of professional conduct if he accepts the proposal?
 

Ans:

Mr. Shah has violated Standard I(B) because accepting these substantial gifts or royal treatment may impede his independence and objectivity. Basic expenses for travel and accommodations should have been paid by his employer.
 

Q:

Rachit Jain, CFA works for an Indian arm of US based investment bank. Indian securities law allow investment bankers, fund managers in participating primary market for their own accounts, whereas US law prohibits managers from participating in IPOs. Jain has applied for shares in NMDC IPO, which is underwritten by his own bank. Is Jain in violation of code and standards of ethics, if he fails to corner any shares of NMDC?
 

Ans:

The correct answer is Violated standard I(A) Knowledge of the Law. Jain should have followed US law which is more stringent than local law.





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