QUESTIONS 1 THROUGH 18 RELATE TO ETHICAL AND PROFESSIONAL STANDARDS.

3. Christy Pasley, CFA, is the Chief Investment Officer for Risen Investment Funds (RIF) a mutual

fund organization. At a meeting between Homeland Builders (HB), a publicly traded company,

Pasley learns HB sales are much slower than expected. In fact, HB sales declined more than 20%

in the last quarter, but this information has not yet been widely disseminated. Immediately after

meeting with HB, Pasley purchases put options on HB stock. Subsequently, HB issues a press

release with their most recent sales figures. Has Pasley most likely violated the CFA Institute

Standards of Professional Conduct?

A. Yes.

B. No, because the securities purchased were options.

C. No, because the information was obtained directly from the company.

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