[单项选择]Isabella Travelli, CFA, is a research analyst for Worldwide Investments in Rome, Italy. Travelli was contacted by Seaside Partners of Milan, Italy, a regional brokerage firm, about doing research on companies in the beverage industry on a contract basis. Travelli may only do the contract work:（）
A. after receiving consent from both Worldwide and Seaside.
B. if Worldwide has no clients in the same geographic area as Seaside.
C. if Worldwide does not follow the beverage industry.

[单项选择]Vivian, CFA, a research analyst assigned to Double Limited, has been recommending the stock’s purchase in her quarterly report. Vivian has recently married and just discovered her husband’s trust account owns several million dollars worth of Double Limited. The stock makes up more than 50 percent of the trust’s value but less than 5 percent of Double Limited’s outstanding shares. According to AIMR Standards of Professional Conduct, Vivian should:（）
A. take no action because the stock is not in her name.
B. disclose her interest in the stock at the time of her next report.
C. cease including Double Limited stock in her report.

[单项选择]Lester Brock is a research analyst preparing a research report on National Brick Company. The financials look solid, and he is contemplating issuing a "Buy" opinion on the stock. However, Brock does have concerns regarding the shareowner rights for equity investors. He is evaluating the shareowner rights of National Brick as outlined in the company’s corporate governance statement and its articles of incorporation. Which of the following policies is most likely detrimental to the shareowners’ interests（）
A. The company uses a third-party entity to tabulate shareowner votes.
B. When electing Directors, shareowners cannot east the cumulative number of votes allotted to their shares for a single candidate. 
C. Shareowners can approve changes to the corporate structure only with a supermajority vote.

[单项选择]A financial analyst and CFA Institute member sends a preliminary research report on a company to his supervisor. The supervisor approves the report, but then the analyst receives news that causes him to revise downward the earnings estimate of the company. The analyst resubmits the report to the supervisor with the new earnings estimate. The analyst soon finds out that the supervisor plans to release the first version of the report with the first earnings estimate without a reasonable and adequate basis. In response to this the analyst must:（）
A. only insist that the first report be followed up by a revision.
B. only take the issue up with regulatory authorities. 
C. insist that the supervisor change the earnings forecast or remove his (the analyst’s) name from the report.

[单项选择]Michael Malone, CFA, is an investment analyst for a large brokerage firm in New York who covers the airlines industry. Alter hours in his personal time, Malone maintains an online blog on which he expresses his personal opinions about various investment opportunities, including, but not limited to, the airlines industry. On his blog, he posts a very negative investment opinion about WestAir stock. Malone knows that WestAir’s stock will be downgraded to a "sell" by his firm next week. Malone has:（）
A. violated Standard Ⅵ (B) Priority of Transactions by releasing material information to the public before releasing to the firm’s clients.
B. violated Standard Ⅱ (A) Material Nonpublic Information by releasing material that could negatively impact the price of the security.
C. violated Standard Ⅳ (A) Loyalty by divulging confidential information that is the intellectual property of his employer.

[单项选择]An analyst, who is a CFA Institute member, manages a high-grade bond mutual fund. This is his only professional responsibility. When the analyst comes across a speculative stock investment that he feels is a good investment for his personal portfolio, the analyst:（）
A. may invest in the stock because the analyst would not purchase the stock for the bond portfolio he manages.
B. may not invest in the stock because of his position as a portfolio manager.
C. is in violation of Standard Ⅳ (A), Loyalty to Employer, by spending time analyzing stocks when he should only analyze bonds.

[单项选择]Karen Wilson, CFA, supervises eight junior analysts at Spartan Financial Services. Karen suspects that one of the analysts is violating Spartan’s personal investing policy. According to the Standards of Practice Handbook, Karen’s most appropriate initial action is to:（）
A. initiate an investigation.
B. notify her supervisor of the analyst’s suspected misconduct.
C. require the analyst to liquidate and close all personal accounts.

[单项选择]Luis Rodriguez, CFA, is an analyst at XYZ Investments. He covers a company that is located in a region that is not easily accessible. The company invites analysts for their annual analyst meeting and pays for the transportation to the remote location. Rodriguez is:（）
A. not allowed to accept the payment for transportation because this is considered a "perk" and may influence his independent judgment.
B. allowed to accept the payment for transportation as long as it does not exceed $100.
C. allowed to accept the payment for transportation because the trip was all business and was out of the way.

[单项选择]Will Lambert, CFA, is a financial analyst for Offshore Investments. He is preparing a purchase recommendation on Butch Corporation for internal use. According to the CFA Institute Standards of Professional Conduct, which of the following statements about disclosure of conflicts is not required Lambert would not need to disclose to his employer:（）
A. offshore is an OTC market maker for Butch Corporation’s stock.
B. his wife owns 2000 shares of Butch Corporation.
C. he is a beneficiary of a pension plan of his former employer that owns a large number of shares of Butch’s stock.

[单项选择]An analyst receives a research report from a colleague. The colleague’s report has an elaborate table with performance data on publicly traded stocks. The colleague says the data in the table consists of measures provided by Standard & Poor’s. The analyst finds the table a useful reference for a report she is writing. She uses several pieces of data from the table. The analyst is potentially in violation of:（）
A. no particular standard because this is appropriate activity.
B. Standard Ⅱ concerning the obligations to the capital markets.
C. Standard Ⅴ (A) if she does not first verify the data in the table is accurate.

[单项选择]Samuel Goldstein, CFA, is an analyst for Tamarack Securities. Goldstein’s father, Reuben, has a client account at Tamarack. In ordering trades, Goldstein should place orders in:（）
A. his clients’ accounts first, his father’s account second, and his account last.
B. his clients’ and his father’s accounts in the first group and his personal accounts in the second group.
C. his clients’ accounts in the first group and his father’s and his own personal account in the second group.

[单项选择]Mason Snow, CFA, is an analyst with Polari Investments. Snow’s manager has instructed him to put only securities that are undervalued on the buy list. Today, Snow is to make a recommendation on the following two stocks: Bahre (with an expected return of 10 percent and a beta of 1.4) and Cubb (with an expected return of 15 percent and a beta of 2.0). The risk-free rate is at 7 percent and the market premium is 4 percent. Snow places:（）
A. neither security on the list.
B. only Bahre on the list.
C. only Cubb on the list.

[单项选择]Gloria Arraria, CFA, is a stock analyst at a large multinational bank trust department. A cash tender offer was announced by a company whose stock was held by Arraria’s employer as well as by her sister. Under the terms of the offer, the first million shares tendered would be accepted in full at $45 a share (which was 15% above the existing market) and the next one million shares on a pro rate basis also at $ 45 a share. Arratia immediately called her sister with the news but waited a few days to tender holdings of the trust department. This situation violated Standard:（）
A. Ⅰ (B)Independence and Objectivity.
B. Ⅵ (B) Priority of Transactions.
C. Ⅳ (A) Loyalty.

[单项选择]Michael Robe, CFA, is a junior analyst for a large financial institution and has been preparing an analysis of United Mines, a coal mining company located in the United States. As part of his research, he examines the company’s proxy voting and rules and practices. Which of the following policies would be considered the most restrictive to shareholders（）
A. United Mines allows proxy voting.
B. Shareholders of United Mines are allowed to cast confidential votes but must be present to do so.
C. United Mines requires shareowner attendance to vote but coordinates the timing of its annual meeting to hold them on the same day as other companies in the region.

[单项选择]Roger Halpert, CFA, prepares a company research report in which he recommends a strong "buy". He has been careful to ensure that his report complies with the CFA Institute Standard on research reports. According to CFA Institute Standards of Professional Conduct, which of the following statements about how Halpert can communicate the report is most correct（）
A. Halpert can make his report in person, by telephone, or by computer on the Internet.
B. Halpert can transmit his report by computer on the Internet.
C. Halpert can make his report by telephone.

[单项选择]An analyst gathered the following information about two option-free bonds that each have a par value of $1000 : Bond 1 Bond 2 Time to maturity 5years 10years Annual coupon rate 5.0% 7.0% Discount rate today 6.0% 6.5% If the discount rate does not change for rather bond, one year from today, which of the following most likely describes the change in price for each bond（）
A. Both bond 1 and 2 will decrease. 
B. Both bond 1 and 2 will increase. 
C. Bond 1 will decrease and bond 2 will decrease.

[单项选择]

Market research
 

Market research has become more and more important in recent years. In some organisations, in fact, managers will not initiate any activity without market research to back. them up.
The first thing to be said about market research is that it is not an (21) to management decision-making. No form of market research, no matter how deep, complicated and detailed, can ever be seen as a substitute for creative decision-making by professional managers (22) its very best, all it can do is (23) some doubt and clarify the nature of the problem. It may even be seen as a tool which can improve the (24) of decisions but it is not in itself a decision-making mechanism.
Market research, in (25) with a number of other approaches in marketing, suffers from the frequent complaint that it is not really accurate. Market research results can never be completely accurate because
A. For
B. From
C. At
D. With

[单项选择]An analyst has calculated the following ratios for a firm: Sales/Total Assets: 2.8 Net Profit Margin (%): 4 Return on Total Assets (%): 11.2 Total Asset/Equity: 1.6 The return on equity for this firm would be closest to:
A. 4.48%.
B. 6.40%.
C. 17.92%.