QUESTIONS 1 THROUGH 18 RELATE TO ETHICAL AND PROFESSIONAL STANDARDS.

5. Sherry Buckner, CFA manages equity accounts for government entities whose portfolios

are conservative and risk averse. Since the objective of her clients is to maximize returns

with the lowest possible risk, Buckner considers adding to their holdings a new, thinly-

traded, leveraged derivative product which she believes has the potential for high returns.

To make her investment decision, Buckner relies upon comprehensive research from an

investment bank that has a solid reputation for top quality research. After her review of

that research, Buckner positions her accounts so that each has a 10% allocation to the

derivative product. Did Buckner most likely violate any CFA Institute Standards of

Professional Conduct by purchasing the derivative for her clients?

A. No.

B. Yes, related to Suitability.

C. Yes, related to Loyalty, Prudence and Care.