EPS - Chapter 2 Eng

Which of following principles is included in the Code of Ethics?

• Conflicts of interest

• Duties to clients

• Professionalism

• Professional behavior

When it comes to ethical principles, discussion often reveals that many employees think: It is fine to browse the Internet or use the work telephone for unlimited numbers of private personal calls.

Which of the following principles is most likely being flouted in this case?

• Independence

• Objectivity

• Integrity

• Confidentiality

​ A case in which financial service firms does both corporate finance services and IPO for the same client is most likely pose which of the following threats?

• Self-review
• Familiarity

• Self-interest

• Advocacy

A case in which financial service firm has financial consulting the client firm for many years, the senior financial consultant has become close friends with the Directors is most likely pose which of the following threats?

• Self-interest

• Intimidation

• Advocacy

• Familiarity

A case in which Financial analyst owns large number of shares in the client company is most likely pose which of the following threats?

• Self-interest

• Intimidation

• Advocacy

• Familiarity

A case in which Directors threaten to change financial analysis service if they do not get a positive analysis report with buying-recommendation. is most likely pose which of the following threats?

• Self-interest

• Intimidation

• Advocacy

• Familiarity

A case in which Financial analyst write a financial analysis report to promote the client’s position or opinion in article is most likely pose which of the following threats?

• Self-interest

• Intimidation

• Advocacy

• Familiarity

To maintain truthfulness, the asset management profession must independent with:

• Investment division

• Employer

• Regulators

You visit a client who is a dealer in sport cars. He sells one of his car to a customer for $16000 with the advertisement of brand-new car with no faults; however he later tells you that the car has a faulty braking system.

What should you do and why?

• Nothing

• Tell the customer

• Tell the client (the car dealer) you believe he acted unethiccally, but that you are bound by confidentiality therefore cannot tell anyone

• Report your client to the authorities

You are a financail analyst of a large multinational organization and have gain non-public insider information about take over but to acquire a rival firm. By coincidence, a family friend is considering sell shares in this rival organisation and has asked you, as an expert in the industry, for advice in this matter. What would you do in compliance with Code of Ethics and why?

• Tell the family friend that it is a bad time to sell and disclose to your employer this communication

• Decline to discuss the issue

• Tell the family friend and your other asset management clients about the take over deal at the same time