Another name for "covered" person is ________.
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A. B. C. D. E. F.Explanation
Access or covered persons have knowledge of pending or actual investment recommendations or action. The firm's definition of access (covered) person should be broad enough to cover all people with that knowledge.
The correct answer for the question "Another name for 'covered' person is ________" is D. access person.
To understand the term "covered person," let's start with some background information. In the financial industry, there are regulations in place to protect investors and ensure fair practices. One such regulation is the Securities Exchange Act of 1934, which includes provisions related to insider trading.
Under this Act, the term "covered person" refers to individuals who have access to material non-public information about a company. Material non-public information refers to information that could significantly impact the price of a security if it were made public.
An "access person" is an alternative term used to describe a covered person. Access persons are individuals who have access to confidential or non-public information about a company, typically due to their position or role within the organization. They may include employees, officers, directors, or consultants who are privy to such information.
Option D, "access person," is the correct answer because it accurately describes individuals who have access to material non-public information and aligns with the terminology used in the financial industry. The other answer choices, such as guardian (A), ombudsman (C), fiduciary (E), and supervisor (F), do not directly correspond to the concept of a covered person or access person in the context of insider trading regulations.
It's worth noting that this answer is specific to the context of the CFA® Level 1 exam and the material covered by the exam provider "Test Prep."