Chapter 3 TF

Question 1

Deciding how we ought to live is the foundation of ethics.

Answer 1

True

Question 2

Ethics is a luxury that a company may indulge in after it meets the critical bottom line.

Answer 2

False. Ethics is not a luxury that a company may indulge in after it meets the critical bottom line. Ethics are required to succeed over any long term period.

Question 3

Laws are largely ethical standards that society has codified in order to insist on and enforce certain behaviors

Answer 3

True. The overlap between what is ethical and legal is referred to as legislating morality.

Question 4

It is impossible to legislate any part of morality.

Answer 4

False. Though it is impossible (and probably also undesirable) to legislate all of morality, laws can be made to cover certain aspects of morality. Examples of such laws are those dealing with stealing, defrauding, and invading the privacy of others. Western cultures legislate some aspects of morality, while other cultures may regulate additional aspects of moral behavior.

Question 5

An ethical problem is more easily defined than a legal problem

Answer 5

False. An ethical problem is not as easily defined as a legal problem. Ethical problems often have no dichotomous solutions.

Question 6

There is a concrete body of ethical standards that serves as recourse in ethical dilemmas.

Answer 6

False. There is no concrete body of ethical standards that serves as recourse in ethical dilemmas.

Question 7

The CFP® Board’s Code of Ethics defines standards of professional conduct of CFP® Board designees for purposes of civil liability.

Answer 7

False. The CFP® Board’s Code of Ethics does not undertake to define standards of professional conduct of CFP® Board designees for purposes of civil liability, but does so to enforce high standards of behavior for those holding the CFP® designation.

Question 8

A professional is a person engaged in a field that requires, among other things, a threshold entrance requirement.

Answer 8

True

Question 9

Practice standards are statements regarding an element of the financial planning process

Answer 9

True. They dictate the minimum acceptable level of behavior for a financial planner

Question 10

A practice standard in the 600 Series is related to defining the scope of the engagement.

Answer 10

False. A practice standard in the 600 Series is related to monitoring the financial planning recommendations.