CIMA Ethics & Investment Consulting Process 2

Question 1

A CIMA professional discovers that a colleague is recommending unsuitable products to elderly clients for higher commissions. What is the FIRST appropriate action?

Accepted Answer

Discuss the concern with the colleague and, if unresolved, escalate internally

Answer

Ethics standards require addressing concerns directly first, then escalating through proper internal channels before external reporting.

Question 2

In the investment consulting process, which step immediately follows the client discovery phase?

Accepted Answer

Investment policy statement development

Answer

After gathering client information in discovery, the next step is formalizing objectives and constraints in an Investment Policy Statement (IPS).

Question 3

A consultant receives a gift worth $500 from an asset manager seeking to win business. Under CIMA standards, this should be:

Accepted Answer

Declined or disclosed and approved per firm policy before acceptance

Answer

Material gifts from third parties must be disclosed and approved per firm policy to avoid conflicts of interest.

Question 4

Which fiduciary concept requires a consultant to act solely in the client's best interest rather than their own or their firm's interest?

Accepted Answer

Duty of loyalty

Answer

The duty of loyalty obligates fiduciaries to prioritize client interests above all competing interests.

Question 5

When constructing an Investment Policy Statement, which element defines the maximum acceptable loss a client can sustain in any given period?

Accepted Answer

Risk tolerance

Answer

Risk tolerance specifies the level of loss a client can emotionally and financially withstand, forming a key constraint in the IPS.

(CIMA) Certified Investment Management Analyst Practice Test

(CIMA) Certified Investment Management Analyst Practice Test

CIMA Ethics & Investment Consulting Process 2