08:11 24/05/2023 Mini Test - Standard I

Mini Test - Standard I Tổng điểm 11/20

The practice of promoting investment by issuing false or misleading positive *0/1

information and then later selling the investment once the price reaches an
artificially high level is an example of transaction-based market manipulation.

True

False

Information is “material” if any individual investor would want to know the *1/1
information before making an investment decision

A. True

B. False

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08:11 24/05/2023 Mini Test - Standard I

Which of these actions would be considered a violation of the CFA Institute *1/1
Standard on market manipulation?

Issuing false rumors about an investment to induce trading by others so you can
benefit from the change in share price

Trading on low-volume securities to exploit market inefficiencies

Selling a stock and immediately buying it back to capture specific tax incentives

Which of the following would result from prolific trading on material nonpublic *1/1
information?• (I). Erosion of investor confidence in investment
professionals and institutions• (II). Efficient allocation of information to the
investing public• (III). Efficient allocation of capital to worthy investments

A. I only

B. II and III

C. I, II, and II

Market manipulation: I. Disrupt the smooth functioning of financial markets; II. *1/1
Lowers investor confidence in financial markets; III. Results in less efficient
capital allocation.

I only

I and II

I, II and III

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08:11 24/05/2023 Mini Test - Standard I

Which of the following is acceptable under the Standard of market *0/1

manipulation?

Transactions that give the impression of artificial activity or price movement in the
price of a security

Exploiting a dominant position to affect the price of an asset or its underlying

derivatives

Using trading strategies that exploit market inefficiencies.

Which of the following is most likely material information? * 0/1

A. A general belief among investment analysts that the economy will improve in the
coming year

B. The opinion of a well – know analysts that the automobile industry will be
profitable in the coming year

C. A disclosure from an automobile company’s CEO that the incorporation of new

technology will increase the fuel efficiency of the company’s products

Information about an investment is material if it is relevant to a particular *1/1

investor regardless of any effects it would have on the price of the security

A. True

B. False

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08:11 24/05/2023 Mini Test - Standard I

Under the Mosaic Theory, when an analyst reaches a conclusion about an *0/1
investment through an analysis of public information and items of nonmaterial
nonpublic information, analysts and their clients may not act on that
information if it is material nonpublic information.

A. True

B. False

Grayson, a financial analyst, is told by the investor relations representative for *0/1
Firebird Avionics, a major aircraft manufacturer, that the firm is in the final
stages of building a new fuel – efficient jet engine. This information was
divulged by FireBird in the most recent quarterly conference call. Grayson uses
this information, along with other information he obtained that the company
distributed to the public, in a research report that includes a “buy”
recommendation for Firebird stock. Which of the following statements is true?

A. Grayson’s actions violate the Code and Standards because he has used material
inside information

B. Grayson’s actions do not violate the Code and Standard

C. Grayson’s actions violate the Code and Standards because he has failed to
separate opinion from fact

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08:11 24/05/2023 Mini Test - Standard I

M&Cs work in many different roles in the investment industry. For individual *1/1
members providing services to clients as commission-based brokers that do
not offer investment advice, which of the following best describes how the
standard of loyalty, prudence and care applies?

The standard is not applicable to commission - based brokers because they do not
have a fiduciary responsibility to the client

The commission - based broker must work prudently in the interest of the client
while executing the requested transaction

The standard creates a fiduciary - level obligation to the client for the commission -
based broker.

Full name *

Trần Minh Anh

Student ID *

2113340007

Using trading strategies that exploit market inefficiencies. * 0/1

Securing a controlling, dominant position in a financial instrument to exploit and

manipulate the price of a related derivative and/or the underlying asset.

Placing multiple, non - bona fide limit orders with the intention of briefly triggering
some type of market movement followed by cancelling the non - bona fide orders
and the entry of an order on the opposite side of the market.on 2

Trading strategies based on perceived market inefficiencies.

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08:11 24/05/2023 Mini Test - Standard I

Which of the following is least likely to assist in determining whether the *1/1
information about investments is materials?

A. If the source of the information is known

B. If the information is specific

C. If the effects of the information on the price of the security are uncertain

Which of the following terms refers to market manipulation practices? I. *0/1

Spoofing; II. Pump and dump; III. Wash Trade

I only

I and II

I, II and III

Information most likely to be used by an analyst under the Mosaic Theory is *0/1
least likely to include

A. Information obtained from a company’s suppliers

B. Government economic data on the health of the economy

C. Information obtained during a conversation with a company’s chief financial

officer

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08:11 24/05/2023 Mini Test - Standard I

Which of the following is most likely a violation of the CFA Institute Standard *1/1
of Professional Conduct related to market manipulation?

Hiring an analyst to complete and publish a research report on a speculative, small -

cap "penny" stock to increase investor interest

Encouraging colleagues to comment favourably on a particular security in investor

chat rooms and on social media to increase investor interest.

Starting a rumor that a company is about to be bought out by a large conglomerate,

increasing its stock price by 35%

In the context of standard II(A), the term “selective disclosure” means: * 1/1

A. Only that information given to clients

B. Only that information given to regulators

C. Only that information given to a small group of analysts, investors, or other market
participants.

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08:11 24/05/2023 Mini Test - Standard I

Watson frequently uses the firm Executive Research to interview leading *0/1
doctors conducting trials of new drugs under development by companies that
he follows. Executive Research requires that both Watson and the experts sign
an agreement not to disclose on the calls trial – related information that is not
yet public. Are there any limitations on the use of information obtained from
Watson’s expert interviews?

A. No, because the signed agreements protect him against any claims of trading on
material nonpublic information

B. Yes, because paying for information conflicts with the Code and Standards

C. Yes, because the receipt of any material nonpublic information would prevent
Watson from issuing a research report until that information was properly disclosed
to the market.

Dunley has been hired by Carson Industries to manage its pension fund. Under *1/1
the Standards, Dudley's duty of loyalty, prudence and care is owed to:

The participants and beneficiaries of Carson's pension plan

The management of Carson

The shareholders of Carson

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08:11 24/05/2023 Mini Test - Standard I

Agustin places multiples, non-bona fide limit orders on one side of the market *1/1
for a security at various price levels away from the best bid or offer to create
the impression of a change in the levels of supply and demand. This action
moves the price of the security. He then executes a trade on the opposite side
of the market at the artificially created price and orders are immediately
canceled. Agustin's actions most likely:
spoofing

Violate the CFA institute standard of Professional conduct related to market

manipulation

Comply with the Code and Standards if the action is taken to benefit clients

Comply with the Code and Standards if the action is disclosed to his employer.

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08:11 24/05/2023 Mini Test - Standard I

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