13) Marco Maggio, CFA, is scheduled to visit the corporate headquarters of Venus Industries. Maggio expects to use the information obtained there to complete his research report on Venus stock. The location of Venus Industries is within a 15-minute drive of a prestigious golf course. On arrival at the Venus premises, Marco Maggio learns that Venus is offering Maggio an extension of his stay that weekend and invites him for a day of golf with all expenses pald. Venus Industries also offers to pay for all the expenses for the trip, including the cost of meals, hotel room, and air transportation back to Venus Industries. The total cost for the weekend is about $2,000 Which of the following actions would be the best course for Maggio to take under the Code and Standards? a) Pay for all travel expenses, including costs of meats and incidental items and politely reject the golf outing offer. b) Reject the golf outing offer but accept the reimbursement of the travel expenses since they are legitimate business-related expenses. c) Accept both the expenses-paid trip and the golf outing as more information can often be extracted from the company in a more leisurely environment. 14) Simon Freud, CFA, is a private-client investment manager at Super Echo investment firm based in Vienna, Austria. One of his clients in Monaco offers him bonus compensation beyond that provided by his firm if the portfolio performance exceeds the agreed benchmark. To make it more attractive to Freud, his client will send the bonus compensation to a tax-free account in a tax haven. Freud a) should report the situation to the compliance officer of the CFA institute according to Standard 1(B) Independence and Objectivity b) should turn down the additional compensation offer because it violates Standard IV(8) Additional Compensation Arrangements. c) may accept the additional compensation subject to the approval of his employer as required by Standard IV(B) Additional Compensation Arrangements. 15) Joseph Luny, CFA, is a bank analyst with London Fog Securities. On a recent trip to see a bank that he covers, he was presented with a rosy outlook for the bank's earnings in the next two years which is above the consensus expectations. When probed further about the assumptions, the CFO inadvertently mentioned that serious discussions are taking place for a tender offer of a smaller well-managed bank that Luny also covers. This information has not been made public. Luny feels very lucky to receive this unexpected tip and rushes back to his office to revise his projections and advise his major clients to buy the smaller bank's stock. What should Luny have done instead? a) Luny should request his supervisor's approval. b) Luny is entitled to take advantage of the information as he did not misappropriate it. c) Luny should refrain from taking any action on the smaller bank's stock until the bank has made the tender offer information public 6/8 16) Simon Sasserman is a trust investment officer at a bank in a small affluent town. He enjoys lunching every day with friends at the country club, where his clients have observed him having numerous drinks. Back at work after lunch, he clearly is intoxicated while making investment decisions. His colleagues make a point of handling any business with Sasserman in the morning because they distrust his judgment after lunch. a) Sasserman violates the code and Standards as his conduct raises questions about his professionalism and competence. b) Sasserman does not violate the code and Standards as he can always use his judgement in the morning. c) Warner does not violate the Code and Standards as his company and his all clients know his habit. 13) Marco Maggio, CFA, is scheduled to visit the corporate headquarters of Venus Industries. Maggio expects to use the information obtained there to complete his research report on Venus stock. The location of Venus Industries is within a 15-minute drive of a prestigious golf course. On arrival at the Venus premises, Marco Maggio learns that Venus is offering Maggio an extension of his stay that weekend and invites him for a day of golf with all expenses pald. Venus Industries also offers to pay for all the expenses for the trip, including the cost of meals, hotel room, and air transportation back to Venus Industries. The total cost for the weekend is about $2,000 Which of the following actions would be the best course for Maggio to take under the Code and Standards? a) Pay for all travel expenses, including costs of meats and incidental items and politely reject the golf outing offer. b) Reject the golf outing offer but accept the reimbursement of the travel expenses since they are legitimate business-related expenses. c) Accept both the expenses-paid trip and the golf outing as more information can often be extracted from the company in a more leisurely environment. 14) Simon Freud, CFA, is a private-client investment manager at Super Echo investment firm based in Vienna, Austria. One of his clients in Monaco offers him bonus compensation beyond that provided by his firm if the portfolio performance exceeds the agreed benchmark. To make it more attractive to Freud, his client will send the bonus compensation to a tax-free account in a tax haven. Freud a) should report the situation to the compliance officer of the CFA institute according to Standard 1(B) Independence and Objectivity b) should turn down the additional compensation offer because it violates Standard IV(8) Additional Compensation Arrangements. c) may accept the additional compensation subject to the approval of his employer as required by Standard IV(B) Additional Compensation Arrangements. 15) Joseph Luny, CFA, is a bank analyst with London Fog Securities. On a recent trip to see a bank that he covers, he was presented with a rosy outlook for the bank's earnings in the next two years which is above the consensus expectations. When probed further about the assumptions, the CFO inadvertently mentioned that serious discussions are taking place for a tender offer of a smaller well-managed bank that Luny also covers. This information has not been made public. Luny feels very lucky to receive this unexpected tip and rushes back to his office to revise his projections and advise his major clients to buy the smaller bank's stock. What should Luny have done instead? a) Luny should request his supervisor's approval. b) Luny is entitled to take advantage of the information as he did not misappropriate it. c) Luny should refrain from taking any action on the smaller bank's stock until the bank has made the tender offer information public 6/8 16) Simon Sasserman is a trust investment officer at a bank in a small affluent town. He enjoys lunching every day with friends at the country club, where his clients have observed him having numerous drinks. Back at work after lunch, he clearly is intoxicated while making investment decisions. His colleagues make a point of handling any business with Sasserman in the morning because they distrust his judgment after lunch. a) Sasserman violates the code and Standards as his conduct raises questions about his professionalism and competence. b) Sasserman does not violate the code and Standards as he can always use his judgement in the morning. c) Warner does not violate the Code and Standards as his company and his all clients know his habit