Question 1–18 19–32 33–44 45–78 79–84 85–120

Sample Examination Structure Topic Ethical and Professional Standards Quantitative Analysis Economic Analysis Financial Statement Analysis and Corporate Finance Portfolio Management Asset Valuation Total

Percent 15 12 10 28 5 30 100

Minutes 27 21 18 51 9 54 180

QUESTIONS 1 THROUGH 18 RELATE TO ETHICAL AND PROFESSIONAL STANDARDS AND ARE ALLOCATED 27 MINUTES. 1. According to the CFA Institute Standards of Practice Handbook, insider trading is least likely to be prevented by establishing: Select exactly 1 answer(s) from the following: A . fire walls. B watch lists, C. selective disclosure. 2. William Wong, CFA, is an equity analyst with Hayswick Securities. Based on his fundamental analysis, Wong concludes that the stock of a company he follows, Nolvec Inc., is substantially undervalued and will experience a large price increase. He delays revising his recommendation on the stock from “hold” to “buy” to allow his brother to buy shares at a lower price. According to the Standards of Practice Handbook, Wong is least likely to have violated the CFA Institute Standards of Professional Conduct that relate to: Select exactly 1 answer(s) from the following: A. duty to clients. B. reasonable b asis. C. duty to his employer. 3. During an onsite company visit, Marsha Ward, CFA, accidentally overheard the Chief Executive Officer (CEO) of Stargazer, Inc., discussing the company’s pending tender offer to purchase Dynamica Enterprises, a retailer of Stargazer products According to the Standards of Practice Handbook, Ward may not use the information to take investment action because: Select exactly 1 answer(s) from the following: A. the information relates to a tender offer. B. acting on the information would breach a duty to both the CEO and Stargazer.
1

C. she does not have a reasonable and adequate basis for taking