Section 1.
Ethics
[CMT Level III_Ethics_Q11]
Jayesh Ghelani, CFA, CMT, manages a portfolio of managed futures accounts for several institutional clients. He invests in various
spread strategies involving a number of commodities. Ghelani has a hunch that gold prices are about to soar. In the past his
hunches have been highly profitable investments, so he asks his technical analyst to draft a bullish outlook for gold that he can
use to help persuade his clients to allocate more money toward gold than his mandate normally allows.
a. Ghelani should draft a research document himself because if he writes the document himself, he will not be in violation of
Standard III(A) not acting with prudence and care.
b. Ghelani should do the analysis himself because the data is likely to be misrepresented otherwise.
information, he would be in violation of Standard I(B) regarding independence and objectivity.
on of
Standard II(D).
Choice c is correct. From the CFA Code of Ethics and Standards of Professional Conduct,
Members and Candidates must use reasonable care and judgment to achieve and
maintain independence and objectivity in their professional activities. Members and Candidates must not offer, solicit, or accept
any gift, benefit, compensation, or consideration that reasonably could be expected to compromise
independence and objectivity
[CMT Level III_Ethics_Q12]
Jim Wixom, CMT, is a proprietary trader who has been trading a system he has developed and refined over the past five years.
that went out last week, Wixom notices that the performance data is much more favorable than he originally documented it to
be. Because the firm is only two weeks away from launching the offering, Wixom decides to say nothing.
Which of the following statements is most likely to be accurate? (2 points)
a. Wixom is not yet in violation of any Standards.
b. Wixom is in violation of Standard III(D) by not making efforts to correct the reported data.
e
off the mark just a little.
d. Wixom is in violation of Standard IV(A) by being disloyal to his employer.
Choice b is correct. From the CFA Code of Ethics and Standards of Professional Conduct,
Section III.D information, Members and Candidates
must make reasonable efforts to ensure that it is fair,
CMT( ) Level III Exam 6 / 16
