Problem:
An investment manager has a number of clients who have indicated that they do not want to take on any additional risk in their portfolios. The manager attends a conference on a new type of derivative that has the potential to significantly increase portfolio performance but also increases the amount of risk to the portfolio. She invests in these new securities for all of her clients with great success. The investment manager: Group of answer choices has violated the CFA Institute Code and Standards by not following the investment parameters set forth by her clients. has not violated the CFA Institute Code and Standards because the amount of additional risk incurred for her clients is well within the parameters that the clients can tolerate in her opinion. has not violated the CFA Institute Code and Standards because the investment strategy she used made money for her clients.