The following information assumes that the CFA Institute Code of Ethics and Standards are applicable.

1. Maria, a portfolio manager at AHA Investments, manages the retirement account established with the firm by her parents. Whenever IPOs become available, she first allocates shares to all her other clients for whom the investment is appropriate; only then does she place any remaining portion in her parents account, if the issue is appropriate for them. She has adopted this procedure so that no one can accuse her of favouring her parents. You are required to establish what is unethical and which Standard is violated.

[3 marks]

2. Todd recently short sold shares of company PQT. He attempts to drive down the stock price by posting rumours through YouTube channels. In his video, he says that as a qualified CFA chartholder, my own analysis has shown that PQT is currently losing market share to its competitors and hence he advises subscribers to reduce their investments in PQT. Please select the correct answer from the three options and explain why it is violated. [3 marks]

1. IV (A) Misrepresentation
2. III (C) Suitability
3. VII (A) Conduct as Members and Candidates in the CFA Program.

3. Serena is based in Singapore and works covering the Singapore market for her U.S. based employer. She is invited to a meeting with the top 20 shareholders of a pharmaceutical company to meet with the management team. During that meeting the finance director mentions that the company will expect its workforce to go on strike next week, which will halt manufacturing and distribution of products. Serena uses this information to update her analyst forecast on the company from a buy to a sell. Please explain which standard is violated.

[3 marks]

4. Joe Smith, an investment adviser, has two clients: Nathan King, 50 years old, and Tony Wall, 40 years old. Both clients earn roughly the same salary, but King wants only to achieve a steady rate of return with low volatility to pay for his childrens education; Wall has a much higher risk tolerance because he has a large asset base. Wall is willing to invest part of his assets very aggressively. Smith recommends investing 25 percent of both portfolios in consumer staple companies with low growth but consistently pay dividends over time.

Did Joes statements to King and Wall violate the CFA Institute Code and Standards? Please explain which standard is breached.