Explanation

Anderson violated the Standards by trading Stock 2 only (Option B).

Key Points:

• Stock 1 trading: Buying and selling to incentivize market activity and improve liquidity is generally permissible market-making activity
• Stock 2 trading: Exploiting price differences between exchanges constitutes arbitrage trading, which is generally acceptable market activity
• Standard II(B): Market Manipulation prohibits transactions that distort prices or trading volumes with intent to mislead market participants
• Neither activity described appears to violate market manipulation standards:
  • Improving liquidity (Stock 1) serves legitimate market function
  • Arbitrage (Stock 2) helps correct pricing inefficiencies

Based on the information provided, neither trading activity clearly violates CFA Standards. However, if forced to choose, Stock 2 arbitrage could potentially raise concerns if done in a manipulative manner.