Question

33.A significant benefit of mosaic theory for CFA members working as financial advisers is that it:

A.is available to be used in an appropriate manner in all circumstances consistent with the Code and Standards

B.allows for the use of material non-public information as long as the CFA Institute has been given prior notice by the member

C.limits the definition of market manipulation to only include those facts that the adviser actually knows about at the time of the relevant event regardless of whether it was reasonable for the adviser to be aware of such issues

D.all of the above

E.none of the above

Answer 1

Financial advisors gathers and interprets large volume of information. Analysts can use signifiant conclusions derived from analysis of public and non material non public information. Under this theory, analysts are free to collect this information without risking violations.

In relation to point B., Mosaic Theory is the process of getting public information (both material and non-material) and private information ( only non-material). The use of material non-public infomration is security valuation is a criminal offence. Therefore, this point is not relevant.

Therefore, thre correct option is A.is available to be used in an appropriate manner in all circumstances consistent with the Code and Standards