Anderson is a portfolio manager at a reputable investment firm, Beta Investments, His job involves managing a diverse investment portfolio including institutional clients and high-networth individuals. Anderson is well respected and has a track record of strong performance. recently Anderson received a report that one of his funds has underperformed in its benchmark index significantly over the past 3 years. the report however was produced by an internal analyst who used a different benchmark for comparison that favored the fund's performance. the actual benchmark that should have been used would have shown that the funds performed slightly better than expected but not significantly. As the fund's performance report is set to be presented at an upcoming meeting. Anderson is faced with a crucial decision. 1. Use misleading performance reports when presenting them to clients, highlighting the fund's superior returns relative to the favorable benchmark. this could potentially lead to new client investments, bonuses, and accolades for Anderson as it would enhance his reputation as a successful manager. 2. correct the report by using the appropriate benchmark and present the accurate performance figures to the clients, which would show less impressive results. though this option is ethically sound, Anderson fears it could lead to clients dissatisfaction, loss of potential investments and damaging his reputation. 1. According to CFA ethical standards which standards would Anderson be breaching?2. How might Anderson's actions affect the trust that clients place in him and the beta investment? 3. what are the steps Anderson can take to ensure that he adheres to the CFA ethical standards while also mitigating the potential negative impacts on his career and the firm's reputation 4. what would be the best course of action for Anderson in this ethical dilemma

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Anderson is a portfolio manager at a reputable investment firm, Beta Investments, His job involves managing a diverse investment portfolio including institutional clients and high-networth individuals. Anderson is well respected and has a track record of strong performance. recently Anderson received a report that one of his funds has underperformed in its benchmark index significantly over the past 3 years. the report however was produced by an internal analyst who used a different benchmark for comparison that favored the fund's performance. the actual benchmark that should have been used would have shown that the funds performed slightly better than expected but not significantly. As the fund's performance report is set to be presented at an upcoming meeting. Anderson is faced with a crucial decision.
1. Use misleading performance reports when presenting them to clients, highlighting the fund's superior returns relative to the favorable benchmark. this could potentially lead to new client investments, bonuses, and accolades for Anderson as it would enhance his reputation as a successful manager.
2. correct the report by using the appropriate benchmark and present the accurate performance figures to the clients, which would show less impressive results. though this option is ethically sound, Anderson fears it could lead to clients dissatisfaction, loss of potential investments and damaging his reputation.

1. According to CFA ethical standards which standards would Anderson be breaching?
2. How might Anderson's actions affect the trust that clients place in him and the beta investment?
3. what are the steps Anderson can take to ensure that he adheres to the CFA ethical standards while also mitigating the potential negative impacts on his career and the firm's reputation
4. what would be the best course of action for Anderson in this ethical dilemma

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