Chartered Alternative Investment Analyst Association (CAIA) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Chartered Alternative Investment Analyst Association (CAIA) Exam with structured quizzes, flashcards, and detailed explanations. Study efficiently and boost your confidence for the test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Jan Hirsh has a personal account with Advisors, Inc. but has not reached the minimum commission level. What does she need to do according to CFA Institute Standards?

No action necessary regarding the account.
Inform her clients verbally about the arrangement.
Report the relationship to her supervisor verbally.
Inform her supervisor in writing about the account.

The correct answer is: Inform her supervisor in writing about the account.

In accordance with CFA Institute Standards, the requirement for Jan Hirsh to inform her supervisor in writing about her personal account with Advisors, Inc. arises from the need for transparency and adherence to the firm's compliance policies. Notifying her supervisor in writing ensures a formal record of the account, allowing the firm to monitor any potential conflicts of interest and ensure that all employee accounts comply with the company's ethical guidelines. This is particularly important when the employee has not reached the minimum commission level, as it may raise questions regarding the personal trading activities that could affect her professional responsibilities. The written notice also provides a clear, documented trail of communication about her personal investment activities, which is essential for maintaining integrity and accountability within the firm.