Question 1.

Find a list of scenarios of Ethics and Standards of practice in Table 5. In each case list the standard applicable for example Standard I (D) Misconduct. Then state if there has been a violation or not and a reason for your answer. (8)

5.1 James Smith is a retired equities trader who manages his portfolio. He owns shares in a large local bank, ABC Bank. A close friend John Spear, is a senior executive at ABC Bank. ABC has seen its share price drops considerably, and the news and outlook are not good. In a conversation about the economy and the banking industry over lunch, John relays the information that ABC will surprise the investment community in a few days when it announces excellent earnings for the quarter. James is pleasantly surprised by this information - he doubles his position in the bank. Subsequently, ABC announces that it had good operating earnings but had to set aside reserves for anticipated significant losses on its loan portfolio. The combined news causes the share to go down 60%.

5.2 Jana Joko, an equity analyst at Typo a large broking firm, submits reimbursement forms over two years to Typo's self-funded health insurance program for bills, most of which have been changed to increase the amount due. An investigation by the firm's director of employee benefits uncovers inappropriate conduct.

5.3 Kyle Komo directs a large amount of his commission business to a New York-based brokerage house. In appreciation for all the business, the brokerage house gives Kyle a few bottles of wine. In addition, they give him two tickets to the World Cup in South Africa, two nights at a nearby resort, several meals, and transportation via limousine to the game. Kyle discloses receiving a gift from the brokerage house to the value of the wine to his supervisor.

5.4 Kingsley Bumm is a performance analyst for Tromp Investment Funds. Kingsley believes that the portfolio manager for the firm's small- and microcap equity fund dislikes him because the manager never offers him tickets to the local rugby team's games but does offer tickets to other employees. To incite a potential regulatory review of the manager, Kingsley creates user profiles on several online forums under the portfolio manager's name and starts rumors about potential mergers for several of the smaller companies in the portfolio. As the prices of these companies' shares increase, the portfolio manager sells the position, which leads to an investigation by the regulator as Kingsley desired.

Question two

The following is the trial balance of KSmooth as at 31 March 2002. Draw up a set of

final accounts for the year ended 31 March 2002.

Dr Cr

Stock 1 April 2001

Sales

Purchases

Carriage inwards

Carriage outwards

Returns outwards

Wages and salaries

Rent and rates

Communication expenses

Commissions payable

Insurance

Sundry expenses

Buildings

Debtors

Sh.

1,816,000

6,918,500

42,000

157,000

1,024,000

301,500

62,400

21,600

40,500

31,800

2,000,000

1,432,000

Sh.

9,234,000

64,000

98Creditors

Fixtures

Cash at bank

Cash in hand

Drawings

Capital

285,000

297,000

11,500

762,000

152,028

816,000

5,088,800

152,028

The distribution of bachelor degrees conferred by a local college is listed below, by major. Major English Mathematics Chemistry Physics Liberal Arts Business Engineering Frequency 2073 2164 318 856 1358 1676 868 9313 What is the probability that a randomly selected degree is not in Mathematics? \// OA. 0.768 OB. 0.303 OC. 0.232 OD. 0.682