Glenarm Company – Question Bank
LO.a: Evaluate the practices and policies presented.
LO.b: Explain the appropriate action to take in response to conduct that violates the CFA
Institute Code of Ethics and Standards of Professional Conduct.
1. Does Sherman violate any CFA Institute Standards, while accepting a job offer from
Glenarm Company, a competitor of Sherman’s existing employer? A.
No.
B. Yes, loyalty to employer.
C. Yes, disclosure of conflicts.
2. While at Pearl, did Sherman violate any CFA Institute Standards, by working as an independent
consultant?
A. Yes, additional compensation arrangements.
B. No.
C. Yes, disclosure of conflicts.
3. In preparing to leave Pearl, did Sherman violate any CFA Institute Standards, while soliciting
clients for Glenarm?
A. Yes, by soliciting the existing and potential clients.
B. No, because he conducted social calls after “office hours.”
C. No, because he told several of Pearl’s clients and prospects to delay their move until he
joined Glenarm.
4. In his transition from Pearl to Glenarm, did Sherman violate any CFA Institute Standards by
taking material that he had worked on with him to his new employment?
A. Yes, only the material that consisted of marketing presentations, and computer program
models.
B. No, because he had developed or prepared this material on his own.
C. Yes, all material because he misappropriated his current employer’s property.
5. Sherman’s rconsulting rbusiness rwhile rat rGlenarm, rleast rlikely rviolates rthe rCFA rInstitute
rStandard rrelating rto: r
A. independence rand robjectivity. r
B. disclosure rof radditional rcompensation rarrangements. r
C. referral rfees. r
r
6. What ris rthe rappropriate raction rrequired rby rGlenarm raccording rto rthe rCFA rInstitute
rStandards rin rview rof rtheir remployees rpursuing rindependent rpractice? rGlenarm rshould
rmake rit ra rfirm rpolicy rfor rall remployees rto: r
A. conduct rtheir rindependent rbusiness rafter roffice rhours. r
B. disclose rin rwriting rin radvance rall rmonetary rand rnon-monetary rbenefits rreceived rin
raddition rto rthe rcompensation rreceived rfrom rthe rfirm. r
C. declare rany rgifts rthat rthey rreceive rfrom rthe rexisting rclients. r
r r
LO.a: Evaluate the practices and policies presented.
LO.b: Explain the appropriate action to take in response to conduct that violates the CFA
Institute Code of Ethics and Standards of Professional Conduct.
1. Does Sherman violate any CFA Institute Standards, while accepting a job offer from
Glenarm Company, a competitor of Sherman’s existing employer? A.
No.
B. Yes, loyalty to employer.
C. Yes, disclosure of conflicts.
2. While at Pearl, did Sherman violate any CFA Institute Standards, by working as an independent
consultant?
A. Yes, additional compensation arrangements.
B. No.
C. Yes, disclosure of conflicts.
3. In preparing to leave Pearl, did Sherman violate any CFA Institute Standards, while soliciting
clients for Glenarm?
A. Yes, by soliciting the existing and potential clients.
B. No, because he conducted social calls after “office hours.”
C. No, because he told several of Pearl’s clients and prospects to delay their move until he
joined Glenarm.
4. In his transition from Pearl to Glenarm, did Sherman violate any CFA Institute Standards by
taking material that he had worked on with him to his new employment?
A. Yes, only the material that consisted of marketing presentations, and computer program
models.
B. No, because he had developed or prepared this material on his own.
C. Yes, all material because he misappropriated his current employer’s property.
5. Sherman’s rconsulting rbusiness rwhile rat rGlenarm, rleast rlikely rviolates rthe rCFA rInstitute
rStandard rrelating rto: r
A. independence rand robjectivity. r
B. disclosure rof radditional rcompensation rarrangements. r
C. referral rfees. r
r
6. What ris rthe rappropriate raction rrequired rby rGlenarm raccording rto rthe rCFA rInstitute
rStandards rin rview rof rtheir remployees rpursuing rindependent rpractice? rGlenarm rshould
rmake rit ra rfirm rpolicy rfor rall remployees rto: r
A. conduct rtheir rindependent rbusiness rafter roffice rhours. r
B. disclose rin rwriting rin radvance rall rmonetary rand rnon-monetary rbenefits rreceived rin
raddition rto rthe rcompensation rreceived rfrom rthe rfirm. r
C. declare rany rgifts rthat rthey rreceive rfrom rthe rexisting rclients. r
r r
