Select the following correct answer and which code and standard is most likely breached.

a. Circle the correct answer

b. Link the correct CFA standard

The following information assumes that the CFA Institute Code of Ethics and Standards are applicable.

1. Cynthia Green is based in the U.S. and works covering the U.S. market for her Singapore based employer. She is invited to a meeting with the top 20 shareholders of a biotechnology company to meet with the management team. During that meeting, the R&D director mentions that the Food and Drug Administration (FDA) has just approved the companys new drug. Can Green use this information to update her analyst forecast on the company from a sell to a buy?

1. No, because she must first determine if the information is public knowledge
2. Yes, as she was invited to the meeting and told by company management
3. Yes, even though the information is nonpublic at the moment, it is nonmaterial

Standard: _____________________

2. Winona recommends the purchase of a mutual fund that invests solely in long-term US Treasury bonds. She makes the following statements to her clients:

1. The payment of the bonds is guaranteed by the US government; therefore, the default risk of the bonds is virtually zero.
2. If you invest in the mutual fund, you will earn a 10% rate of return each year for the next several years based on historical performance of the market.

Did Winonas statements violate the CFA Institute Code and Standards?

1. Neither statement violated the Code and Standards
2. Only statement I violated the Code and Standards
3. Only statement II violated the Code and Standards

Standard: _____________________

3. Maria is scheduled to visit the corporate headquarters of Instant Tech Industries. Maria expects to use the information she obtains there to complete her research report on Instant Tech stock. Maria learns that Instant Tech plans to pay all of Marias expenses for the trip, including costs of meals, hotel room, and air transportation. Which of the following actions would be the best course for Maria to take under the Code and Standards?

1. Pay for all travel expenses, including costs of meals and incidental items
2. Accept the expense-paid trip and write an objective report
3. Accept the expense-paid trip but disclose the value of the services accepted in the report

Standard: _____________________