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Question:

Smith Rivers, CFA, manages the portfolio of Alan Chou. Alan has retired and relies on his investment portfolio exclusively to provide income every year to meet living expenses. Alan places an order with Smith to invest half his portfolio in a very risky biotech company. Which of the following should Smith least likely do?

A Go ahead and make the trade
Explaination

According to Standard III (C): Suitability, members who are in an advisory relationship with a client must conduct a suitability analysis prior to making a recommendation or taking investment action. In case of unsolicited trade requests that a member knows are unsuitable for the client, the member should refrain from making the trade or seek an affirmative statement from the client that suitability is not a consideration.