Griffin Financial Solutions (GFS), a boutique investment firm based in San Francisco, has a stellar reputation for delivering high-quality service to its clients. The firm employs numerous CFA charterholders, including Angela Stevens, Benjamin Taylor, Catherine Ford, and David Adams. The firm has adopted the CFA Institute Code and Standards as its own Code of Ethics and Standards of Practice. The firm is subject to United States federal rules and regulations and European Unions standards with respect to E.U. member clients.

Angela Stevens is the Director of Equity Research. One day, Angela was invited to lunch by a fellow MBA program alumni who paid for the meal at a local diner. During lunch her friend told Angela that she was excited that her firm MedTech Corporation, a healthcare company, was going to soon announce an impending merger. Despite the potential benefits that could arise from this information, Angela decided not to act on the tip and informed her supervisor of all the details of the lunch meeting.

Catherine Ford was invited to a factory tour of a firm on her coverage list. Due to the unavailability of a commercial flight to that location, the firm sent a company plane to bring her to the tour.

Meanwhile, Benjamin Taylor, a colleague of Catherines prepared a financial model on the economic outlook to be sent to a client. The model was based on the firms probabilities of growing economy (20%), a soft landing from a rising interest rate environment with flat growth (75%) and a low probability of a hard landing with a recession (5%). Given the low probably of the third scenario only the first two scenarios were included in the model.

1. In the event of a conflict between CFA Institute, U.S. federal and E.U. standards, the firm should:

Group of answer choices

A. Always apply U.S. Standards, except for those clients based in the E.U.

B. Always apply the stricter of U.S. federal standards and CFA Institute standards for U.S. based clients.

C. Always apply CFA Institute Standards.

2. Did Angela Stevens, CFA, violate CFA Institute Standard I Professionalism?

Group of answer choices

A. Yes, because she failed to encourage immediate publication of the information.

B. Yes, because she accepted a gift by allowing her friend to pay for lunch.

C. No.

3. Has Catherine Ford adhered to CFA Institute Standard I (B) Independence and Objectivity?

Group of answer choices

A. No, because she may only accept modestly arranged travel.

B. Yes, as long as she reports the trip to her supervisor.

C. Yes, because a commercial flight was not available.

4. Did Benjamin Taylor, CFA violate Standard I on Professionalism?

Answer choices

A. No, if the overall forecast incorporated the probability of a recession even if not disclosed.

B. Yes, because the omission could be misleading.

C. No, because the probability of a recession was not material.