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CFA Level III Mock Exam 1
June, 2012 Copyright © 2010-2012. All rights rerved. Copying, reproduction or redistribution of this material is strictly prohibited.
< – 1st Mock Exam 2012 (PM Session)
Questions Topic Minutes 1-6 Ethical and Professional Standards 18 7-12 Ethical and Professional Standards 18 13-18 Monitoring and Rebalancing 18 19-24 Performance Evaluation and Attribution 18 25-30 Risk Management Application of Derivatives 18 31-36 Equity Investments 18 37-42 Alternative Investments 18 43-48 Fixed-Income 18 49-54 Capital Market Expectations 18 55-60 Global Investment Performance Standards 18尊字组词
Total180
Questions 1 through 6 relate to Ethical and Professional Standards.
Kathy Mooney Ca Scenario
Kathy Mooney works for Ace Investment Management (AIM) as a portfolio manager and investment advisor. Mooney is one of the most nior portfolio managers at the firm and has worked through AIM’s early development phas. After ten years since establishment, AIM has now managed to earn a sound standing amongst its competitors, and has attracted a diver t of private wealth and institutional clients. Due to Mooney’s niority and initial assistance in founding the firm, AIM pays her a competitive ba salary along with lucrative fringe benefits. In addition, Mooney receives additional monetary compensation when she is successful in the sales process and generation of asts under management for AIM. Hence, during client meetings, Mooney often mentions the rvices her firm offers, how they are unique, what new product offerings AIM has launched and how they might be an attractive inclusion to their portfolios. The asts generated through such marketing are invested in proprietary offerings such as affiliate mutual funds and in-hou investment vehicles. Mooney does not disclo this compensation agreement to clients and prospects.
Mooney earned the right to u the Chartered Financial Analyst designation three years back and now participates in the CFA Examination Grading Program. Prior to participation in the program, Mooney signed the Grader Agreement where she agreed not to reveal or discuss examination materials with anyone except CFA Institute staff and other graders. One month back, Mooney compl
eted the CFA examination grading for Level III candidates. Recently, during a conversation with some Level III candidates at AIM who had appeared for the exam, Mooney mentioned the questions she graded and how students performed on the questions on average.
Due to her participation in the CFA Institute Grading Program, Mooney has made contacts with a number of professional figures in the investment community. John Reitz, a portfolio manager and a CFA charterholder, is one such figure that Mooney has managed to be friends with. Reitz works for an investment firm with branches nation-wide, and is also a member of the CFA Institute Investment Performance Council (IPC). The IPC is responsible for the creation and revision of the CFA Institute performance prentation standards. Since Reitz has advanced knowledge of any changes or revisions to be made in the standards, he us this information to assist his firm in keeping up with the changes to the standards. This ensures that his firm is in complete compliance with the changes and is following best practice with regards to performance prentation. Mooney believes that this is esntial to provide fair and accurate information to clients and prospects.
幼儿园运动会项目Mooney has been assigned the task of preparing marketing material for Ace Investment Management to be distributed to prospective clients. In preparing the material, Mooney plans to include the following information:
凑合的近义词
创业的本质是什么1.Ace Investment Management includes five employees that are charterholders.
Two employees are expected to complete the Level 2 examination by early 2010.
2.Ace Investment Management also recruits portfolio managers from around the
globe to bring diversity to their employee ba. Two of them are John Doe and
Kelly Dustin, both of whom have CFA-equivalent program degrees.
3.AIM encourages its employees to enroll in the CFA Program to obtain the highest
t of credentials in the global investment management industry.”
After work, Mooney decided to visit her friends, Randy Singer and Tony Deale. Singer is a successful portfolio manager and a CFA charterholder. However, after twenty years of working in the investment industry, Singer finally decided to retire. Since he is no longer working for any firm, nor is engaged in the investment industry, he does not file a Professional Conduct Statement with the CFA Institute. When his friends ask him for his contact number, Singer hands out a plain business card with his new contact details where he us ‘CFA’ after his name.
Deale is a young portfolio manager who recently joined an investment management firm as a financial analyst. Deale has earned both his CFA designation and a PhD in finance and investment. Deale completed the PhD after earning the CFA charter. When designing his business card, Deale cited the CFA designation after listing her PhD.
Mooney has just been hired as a consultant by Jenna Levine, a chemical engineer with a fifteen years experience with Oxy-Chemicals (OXC), a leading firm in the chemicals industry. After her tenure at OXC, Levine joined an investment firm as a rearch analyst covering the chemicals industry. During her time at the firm, Levine invested her own portfolio in a number of firms in the chemicals industry and made significant money bad on her rearch. However, most of her portfolio still constitutes her ownership in OXC, which she earned through an ESOP at the firm. Just recently, Levine was hired by Hydro-Chemicals (HYC) to devi a strategy that would increa the firm’s operating efficiency. As part of the strategy, Levine instructed HYC to share resources and profits with OXC. Her detailed analysis indicated that working with OXC would reduce costs, eliminate excessive wastage and increa profits. The board of HYC is, however, skeptical of the plan’s appropriateness, given Levine’s personal portfolio composition.
1.With respect to her compensation agreement, is Mooney most likely following
羽毛球的英语best practice as dictated by the Code of ethics and the Standards of Professional Conduct?
A.No.
沙之书B.Yes, becau sales efforts attempting to attract new investment
management clients need not disclo this fact.
C.Yes, becau the Standards do not prohibit Mooney from generating new
business for her employer since it is obvious to clients and prospects that
she is referring to the rvices of AIM.
Correct Answer: A
Reference:
CFA Level III, Volume 1, Study Session 1, Reading 2, Pages 136
飞扑漫画Mooney does not follow best practice. In this ca, the asts will be managed in ‘proprietary product offerings’ of the manager’s company and Mooney will
receive additional compensation for lling firm products. Although some笋片怎么做好吃
sophisticated investors may realize that it would be financially beneficial to
Mooney and her firm if the investor buys the product offerings of the firm, best practice dictates that Mooney should disclo to clients that she is compensated for referring clients to firm products. Such disclosure will meet the purpo of Standard 6 (C) ‘Referral Fees’.
2.With respect to her discussion with Level III candidates, has Mooney most likely
violated Standard 7 (A) ‘Conduct as Members and Candidates in the CFA
Program’ of the CFA Institute Standards of Professional Conduct?
A.Yes.
B.No, becau she discusd the questions with students who had already
appeared for the exam.
C.No, becau she not only discusd the questions with CFA candidates
who had already appeared for the exam and knew the questions, she
disclod the information well after the exam was over.
