Explanation:
Analysis of Yip's actions:
Referral Fees (Standard VI(C)): Yip is not violating this standard because she is not receiving referral fees from third parties for recommending their services. She is receiving direct commissions from the mutual fund companies for selling their products, which is standard compensation for sales agents.
Disclosure of Conflicts (Standard VI(A)): Yip likely violates this standard because:
Priority of Transactions (Standard VI(B)): Yip least likely violates this standard because:
Key points:
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Yip Wai Yin, a CFA candidate, is an independent mutual fund sales agent. For every front-end load product she promotes, Yip receives a portion of the front-end fee as commission at the time of sale. For every back-end load fund she sells, Yip receives a smaller commission paid at the end of the year. Yip always informs her clients that she is paid a commission as an agent, but does not provide details of the compensation structure. When pitching her favored front-end load product line she tells clients 20% of her commission is always invested in the same fund as proof of her confidence in the fund she recommends. Which Standard does Yip least likely violate?
A
Referral Fees
B
Disclosure of Conflicts
C
Priority of Transactions
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