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FRM Part I · FRM Exam Part I · GARP Code of Conduct

A risk consultant who is a GARP member is offered a lavish all-expenses-paid trip by a software vendor whose product she is currently evaluating for her client. Which course of action is most consistent with the GARP Code of Conduct?

She should decline the trip, or at minimum disclose the offer to her client and avoid the conflict. The GARP Code requires members to avoid or disclose conflicts that could impair objectivity. Accepting a lavish gift from a vendor under evaluation compromises independence, whether or not she intends to remain impartial.

  1. AAccept the trip and ignore it in the evaluation
  2. BAccept it and disclose it only if the vendor is selected
  3. CDecline, or disclose the offer to her client and avoid the conflict of interestCorrect
  4. DAccept it provided she shares the trip with her colleagues

Explanation

The Code requires members to avoid or disclose conflicts of interest that could impair objectivity. A lavish gift from a vendor under evaluation creates such a conflict. Accepting it, even with intent to stay impartial, or disclosing only after selection, does not satisfy the duty. Sharing it with colleagues does not remove the conflict.

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