Discus Standard Priority of Transactions

Discus Standard Priority of Transactions
1. Karen Jones, CFA, is an outside director for Valley Manufacturing. At a director’s meeting, Jones
finds out that Valley Corp. has made several contributions to foreign politicians that she suspects
were illegal. Jones checks with her firm’s legal counsel and determines that the contributions
were indeed illegal. At the next board meeting, Jones urges the board to disclose the
contributions. The board, however, votes not to make a disclosure. Jones’s most appropriate
action would be to:
A. protest the board’s actions in writing to the executive officer of Valley.
B. resign from the board and seek legal counsel as to her legal disclosure requirements.
C. inform her supervisor of her discovery and cease attending meetings until the matter is
resolved.
2. Beth Bixby, CFA, uses a quantitative model to actively manage a portfolio of stocks with an
objective of earning a greater return than the market. Over the last three years, the returns to a
portfolio constructed using the model have been greater than the returns to the S