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Jorgenson is a senior bond analyst with Morgan Co., a large investment banking firm. Over the past quarter, Morgan's corporate bond department has been betting on the credit spreads in the market narrowing and in anticipation, has invested a large amount of capital in the bonds of two firms, High Tech and Amerizone.com. Unfortunately, the credit spreads have not displayed much activity and as the quarter end is approaching, the department wants to unload the bonds. For this, it puts pressure on Jorgenson to push the bonds on some of his larger clients. Jorgenson believes that both the bonds are good investments since High tech and Amerizone have been doing very well and their prospects look rosy. So he goes ahead and convinces his clients to purchase as much as a third of Morgan's bond holdings in these companies. Morgan has
Jorgenson is a senior bond analyst with Morgan Co., a large investment banking firm. Over the past quarter, Morgan's corporate bond department has been betting on the credit spreads in the market narrowing and in anticipation, has invested a large amount of capital in the bonds of two firms, High...
Each ________ needs to comprise portfolios or asset classes that represent a similar investment goal.
Each ________ needs to comprise portfolios or asset classes that represent a similar investment goal.A . returnB . compositeC . valueD . benchmarkE . mixView AnswerAnswer: B Explanation: All actual fee- paying discretionary portfolios must be included in at least one composite defined according to similar strategy or investment objective.
Another name for "covered" person is ________.
Another name for "covered" person is ________.A . guardianB . none of these answersC . ombudsmanD . access personE . fiduciaryF . supervisorView AnswerAnswer: D Explanation: Access or covered persons have knowledge of pending or actual investment recommendations or action. The firm's definition of access (covered) person should be broad...
Each of the following is true regarding Standard II (A), except:
Each of the following is true regarding Standard II (A), except:A . You must be registered for the next CFA exam in order to call yourself a candidate.B . This standard relates to business cards and letterheads.C . This standard does not relate to oral statements.D . There is no...
II. "If you invest in the mutual fund, you will earn a 15 percent rate of return each year for the next several years." Did Grey's statements violated AIMR's Code and Standards?
Grey recommends the purchase of a mutual fund that invests solely in long- term U.S. Treasury bonds. He makes the following statements to his clients: I. "The payment of the bond is guaranteed by the U.S. government; therefore, the default risk of the bonds is virtually zero." II. "If you...
According to the AIMR- PPS, systems incompatibilities
According to the AIMR- PPS, systems incompatibilitiesA . causes distortion of performance presentation and needs to be disclosed.B . are one reason for which a firm may not claim compliance for all assets.C . cannot be used as a reason for not claiming compliance for all assets.D . render a...
When formulating an investment policy for a client, all of the following fall under "investor constraints," except ________.
When formulating an investment policy for a client, all of the following fall under "investor constraints," except ________.A . liquidity needsB . regulatory and legal circumstancesC . risk toleranceD . tax considerationsE . expected cash flowsF . investable fundsG . investor preferences, circumstances and unique needsH . none of these...
Arbaaz, an AIMR member, works for an investment advisory firm, Leon Investments. His friend, Shahzad, recently asked him for some investment recommendations. Arbaaz analyzed Shahzad's portfolio over a weekend and suggested some changes. While he did not accept any remuneration, Shahzad promised him some gifts if his portfolio "performed well." Arbaaz did not inform his employer since he thought he was helping a friend and in any case, the Shahzad's account was extremely small and there were no financial payments. Arbaaz has:
Arbaaz, an AIMR member, works for an investment advisory firm, Leon Investments. His friend, Shahzad, recently asked him for some investment recommendations. Arbaaz analyzed Shahzad's portfolio over a weekend and suggested some changes. While he did not accept any remuneration, Shahzad promised him some gifts if his portfolio "performed well."...
According to the AIMR- PPS for venture and private placements, ________ internal rate of return must be presented since inception of the fund and be net of fees, expenses and carry to the limited partner.
According to the AIMR- PPS for venture and private placements, ________ internal rate of return must be presented since inception of the fund and be net of fees, expenses and carry to the limited partner.A . limitedB . extendedC . cumulativeD . generalView AnswerAnswer: C Explanation: Cumulative internal rate of...
Fundamental Responsibilities is dealt with under:
Fundamental Responsibilities is dealt with under:A . Standard IB . Standard IIIC . None of these answersD . Standard VE . Standard IIF . Standard IVView AnswerAnswer: A Explanation: Fundamental Responsibilities is dealt with under Standard I.
