Ethics question I encountered on Kaplan’s study material.

Yeah I thought this one was a crappy question too. Too much was “implied”….Schweser ethics stuff can be pretty hit or miss.

Ethics is quite subjective at times. I think some ethics answers would differ between two official question writers. I often come across questions that I dismiss the official answer, hoping that the real exam will take more thought into removing the need for blind assumptions. However, you only need to get 70-80% of the ethics questions right to feel “safe” on that topic. 

Often they write questions that seem like WTF (official word in the Oxford dictionary now). I often read the end of the question first where they ask, has this person violated this specific standard or the standard in general. You can get multiple violations however the specific question may relate to a standard they have not violated. With a question like yours it’s safe to assume there were red flags in multiple places and they violated the standard in general. Also, im pretty sure in Quants it states 36 observations for a large enough example size. You can view investments on ticks but this person seems like a passive investor and a 1yr return wouldn’t be enough to change strategies alone.