paying for travel expenses not a violation?

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Mathew is planning a trip to Sri Lanka to research the tea industry. Murali Premadosa, CFA, known as “Prem,” is a research analyst for a stock broking company, Ashoka Brokers, headquartered in Colombo, Sri Lanka. Mathew contacts Prem to help arrange visits to specifically identified tea estates of publicly traded companies in the highlands of Sri Lanka.
Prem, wanting to enhance the business relationship with Gupta, arranges for all of Mathew’s Sri Lankan expenses to be paid for by Ashoka. These costs include food, hotel, and transport. This arrangement is based on the understanding that all security transactions resulting from Mathew’s trip to Sri Lanka will be executed through Ashoka.
The q asks what the violation was. apparently Prem did not violate independence and objectivity. how come?
 
Perhaps it is in a remote location where arranging accommodations are difficult? I’d need to see all the answer choice options
 
This is the first 2 paragraphs of the q
Christian Mathew, CFA, is an equity analyst specializing in the beverage industry for Gupta Asset Managers (Gupta), a portfolio management company based in Mumbai, India. Mathew is planning a trip to Sri Lanka to research the tea industry. Murali Premadosa, CFA, known as “Prem,” is a research analyst for a stock broking company, Ashoka Brokers, headquartered in Colombo, Sri Lanka. Mathew contacts Prem to help arrange visits to specifically identified tea estates of publicly traded companies in the highlands of Sri Lanka.
Prem, wanting to enhance the business relationship with Gupta, arranges for all of Mathew’s Sri Lankan expenses to be paid for by Ashoka. These costs include food, hotel, and transport. This arrangement is based on the understanding that all security transactions resulting from Mathew’s trip to Sri Lanka will be executed through Ashoka. Ashoka’s commissions are typically similar to its competitors but it can take a few extra days to execute larger volumes of trades because Ashoka is new to the brokerage business. Prem sets the itinerary, with plans to visit a minimum of six Sri Lanka tea companies in the three tea-growing regions. Mathew agrees to the visits and asks Prem to create a list of questions to ask the management of each company to which he will add his own questions.
Is Prem’s arrangement to enhance business relations most likely consistent with the CFA Institute Code of Ethics and Standards of Professional Conduct?
  1. No, with regard to independence and objectivity.
  2. No, with regard to best execution.
  3. Yes.
Answer is 2. I understand why its 2 but I’m wondering about 1 here. Prem arranged for all the expenses. The q provides no indication about how easy/difficult it would have been for Matthew to make his own arragements. This sentence is what is tripping me up “This arrangement is based on the understanding that all security transactions resulting from Mathew’s trip to Sri Lanka will be executed through Ashoka.” How is this not a problem? Can someone explain why it cant be 1
 
Paying for ones own transportation is a recommendation of the CFA Standards of Professional Conduct, so by accepting the company to pay for those charges wont be a violation, it just isn’t the best practice
 
im in the same boat too. The fact that even it doesnt influence him, it surely has the appearance of influence (Prem even sets the itenarary etc.) also it has infact influenced him to choose Ashoka (who do not provide best execution), is something i thought was enough evidence of impairment of objectivity and independance.
 
The way MM explains this type of question is you are looking at what maybe a problem vs. what is DEFINITELY a problem. Best execution is definitely not going to be there. But its unclear if it is impairing objectivity (likely a yes but not enough information to tell). Basically go with what has a stronger likelihood.
 
What I’m trying to do is use Expense Claims to enter travel expenses that are billable to clients but were paid by personal cash and credit cards of the traveler. My company has a detailed expense report form on which the traveler records daily expenses.
 
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