The Code Of Ethics Quiz!

27 Questions | Total Attempts: 46

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The Code Of Ethics Quiz!

Are you aware of the code of ethics? What are the benefits of a strong ethical culture? Where have you seen ethics come up in society? Can you explain the conflict of interest? What is a significant component of conflict? What are the gifts and entertainment policy? If you are someone who struggles with treating others the way you would treat yourself, then this quiz is for you!


Questions and Answers
  • 1. 
    The Code of Ethics Rule requires that Codes of Ethics address personal trading in order to control the ability to engage in insider trading.
    • A. 

      True

    • B. 

      False

  • 2. 
    Ethics is doing what our Code of Ethics proscribes.
    • A. 

      True

    • B. 

      False

  • 3. 
    One of the benefits of a strong ethical culture is increased investor trust and confidence in the firm.
    • A. 

      True

    • B. 

      False

  • 4. 
    In the Asset Advisors case, SEC enforcement action could have been avoided if the firm adopted a Code of Ethics.
    • A. 

      True

    • B. 

      False

  • 5. 
    A fiduciary is:
    • A. 

      Someone who has a legal obligation to protect another.

    • B. 

      Someone who took a fiduciary oath to put his clients’ interests ahead of his own.

    • C. 

      The name that refers to a person who can be trusted.

    • D. 

      A person or entity responsible for acting in the best interests of others.

  • 6. 
    Fiduciary Duty is – (select all that apply)
    • A. 

      An obligation that clients expect of their investment advisor.

    • B. 

      A legal requirement of loyalty and care that applies to any person or organization that has a fiduciary relationship with another person or organization.

    • C. 

      A voluntary obligation that only the most ethical firms undertake.

    • D. 

      A duty for which a breach results in automatic disbarment from the industry.

  • 7. 
    A conflict of interest is any activity or relationship in which an adviser's interests compete, conflict or are inconsistent with the interest of its clients.
    • A. 

      True

    • B. 

      False

  • 8. 
    A conflict of interest need not be disclosed to the CCO if the employee can reasonably cure the conflict on their own.
    • A. 

      True

    • B. 

      False

  • 9. 
    Which of the following is not one of the major components of a Conflicts of Interest Policy?
    • A. 

      Mitigate

    • B. 

      Disclose

    • C. 

      Monitor

    • D. 

      Eliminate

  • 10. 
    Mary’s husband is the CEO of Kingdom Company, a publicly held company. Mary is a portfolio manager for PIA.  Mary wants to purchase a large position in Kingdom Company for PIA’s clients. Is this a conflict of interest?
    • A. 

      Yes

    • B. 

      No

  • 11. 
    The Gifts and Entertainment Policy applies to gifts and entertainment given to or received from third parties that the firm does or may do business with in the future (e.g. customers, potential investors, brokers, portfolio company owners).
    • A. 

      True

    • B. 

      False

  • 12. 
    Permissible gifts include tickets to an event, a gift card, or a bottle of wine if each item is valued at less than $100.
    • A. 

      True

    • B. 

      False

  • 13. 
    Entertainment is defined as an event, such as dinner or a sporting event, at which the donor also attends.
    • A. 

      True

    • B. 

      False

  • 14. 
    All gifts, including promotional items of de minimis value, must be reported to the CCO.
    • A. 

      True

    • B. 

      False

  • 15. 
    Any political contribution to an elected official (including candidates for office) in violation of the Pay-to-Pay Rule will trigger a two-year time out period during which the investment adviser will be prohibited from receiving compensation for providing advisory services to the governmental entity.
    • A. 

      True

    • B. 

      False

  • 16. 
    Only political contributions in states or municipalities where the firm performs investment advisory services must be pre-approved by the CCO.
    • A. 

      True

    • B. 

      False

  • 17. 
    Which of the following is/are false regarding the Pay-to-Play Rule?
    1. An employee may contribute to a presidential candidate only if the candidate previously held office in his home state.
    2. An employee may contribute up to $500 to a candidate in a jurisdiction in which he is entitled to vote.
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      Both statements are false.

  • 18. 
    Political contributions made to a relative running for office are always permissible. And need not be disclosed.
    • A. 

      True

    • B. 

      False

  • 19. 
    Which of the following is false regarding the personal trading policy at FIS?
    1. If you have material, non-public information about a security, your household family members may not engage in a trade with that security.
    2. If you have material, non-public information about a security, a broker who has discretion over your account may trade in that security on your behalf.
    3. No Access Person may trade in any security during the Blackout Period.
    4. All employees are deemed to have material, non-public information about any securities that appears on the firm’s Restricted List).
    • A. 

      Statement 1

    • B. 

      Statement 2

    • C. 

      Statement 3

    • D. 

      Statement 4

  • 20. 
    Access persons can submit their pre-clearance request 1 day prior to or 1 day after any trading activities.
    • A. 

      True

    • B. 

      False

  • 21. 
    FIS Access Persons are required to submit a Trade-Pre-Clearance Request for purposes of pre-clearing a trade?
    • A. 

      True

    • B. 

      False

  • 22. 
    FIS and PIA employees should not trade based on MNPI because:
    1. It is a breach of their fiduciary duty.
    2. It could result in criminal penalties.
    3. It could damage the firm’s reputation
    • A. 

      1 and 3

    • B. 

      2 and 3

    • C. 

      1, 2 and 3

  • 23. 
    Section 204A of the Advisers Act requires every investment adviser to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of material, nonpublic information by the adviser and any person associated with the adviser.
    • A. 

      True

    • B. 

      False

  • 24. 
    John learns from his neighbor that the CEO of a public company is considering retiring in 2 years. John decides to buy stock in the company because he believes the number 2 guy will do a much better job. Has John engaged in insider trading?
    • A. 

      Yes

    • B. 

      No

  • 25. 
    Alice’s husband Mike is the CFO for a beverage manufacturer. Alice happened to see a memo on her husband’s desk that described an acquisition of the company by Coca Cola. Alice was concerned that the acquisition might mean that they would have to relocate. She was so upset that she told her mother about the pending acquisition and what it might mean for her family. Her mother immediately bought stock in the company expecting it to rise after news of the acquisition was announced. Surprisingly the stock fell $5 a share. Did Alice commit insider trading?
    • A. 

      Yes

    • B. 

      No

    • C. 

      It depends.