Answer-first summary for fast verification
Answer: Yes, this is a violation of the GARP Code of Conduct.
## Explanation Yes, this is a violation of the GARP Code of Conduct. According to GARP's Code of Conduct, members have a professional obligation to maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals. **Key violations:** - **Professional competence**: Manzoor failed to stay current with developments in risk measurement methodologies - **Due diligence**: He implemented outdated risk measurement approaches without verifying their current relevance - **Professional standards**: Using outdated methodologies that are no longer internationally recognized violates the requirement to use appropriate and current professional practices **Important notes:** - Ignorance of changes in the field is not a valid defense for GARP members - GARP members are expected to maintain current knowledge in their professional areas - The fact that neither Manzoor nor his firm was aware of the changes does not excuse the violation - This represents a failure in professional development and staying current with industry standards
Author: LeetQuiz Editorial Team
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Junaid Manzoor has been hired as head of risk management by KDB Asset Management, a small investment firm in Pakistan. Manzoor implements a risk measurement framework to gauge portfolio risk for the firm. Unfortunately, the methodology he implements for risk measurement has changed considerably in recent years and is no longer used internationally. Neither Manzoor nor anyone else at the firm is aware of the changes to risk measurement approaches. As a GARP member, has Junaid violated the GARP Code of Conduct?
A
No, this is not a violation of the GARP Code of Conduct because neither Manzoor nor the firm is aware of the changes to risk measurement approaches.
B
No, this is not a violation as the methodology worked when Manzoor took his FRM exams.
C
This is only a violation of the GARP Code of Conduct if investment decisions are made based on Manzoor's risk reports.
D
Yes, this is a violation of the GARP Code of Conduct.
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