Code of Ethics and Standards of Professional Conduct

Question 1

The _____ contains high-level aspirational ethical principles that drive members and candidates to create a positive
and reputable investment profession

Answer 1

Code of Ethics

Question 2

The _______ contain practical ethical principles of conduct that members and candidates must follow to achieve the broader
industry expectations

Answer 2

Standards of Professional Conduct

Question 3

Mission of the CFA Institute

Answer 3

To lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate
benefit of society

Question 4

Promote the integrity and viability of the global capital markets for ______

Answer 4

the ultimate benefit of society

Question 5

Members and Candidates must make reasonable efforts to ensure that _______

Answer 5

anyone subject to their supervision or authority complies with applicable
laws, rules, regulations, and the Code and Standards

Question 6

Addition to the Code of Ethics

Answer 6

Disclose to clients and prospective clients significant limitations and risks
associated with the investment process.

Question 7

The CFA Institute Board of Governors maintains oversight and responsibility for the _________, which,
in conjunction with the ____________, is responsible for
enforcement of the Code and Standards.

Answer 7

Professional Conduct Program (PCP)

Disciplinary Review Committee (DRC)

Question 8

The CFA Institute ________ form the basic structure for enforcing the Code and Standards

Answer 8

Bylaws and Rules of Procedure for Professional Conduct (Rules of Procedure)

Question 9

members
and candidates must self-disclose on the annual _________ all matters that question their professional conduct, such as involvement in civil litigation
or a criminal investigation or being the subject of a written complaint

Answer 9

Professional Conduct Statement

Question 10

written complaints received by Professional Conduct staff can _________

Answer 10

bring about an investigation

Question 11

Upon reviewing the

material obtained during the investigation, the Professional Conduct staff may conclude the inquiry with ______ (3)

Answer 11

no disciplinary sanction, issue a cautionary letter, or continue
proceedings to discipline the member or candidate.

Question 12

If the Professional Conduct staff believes a violation of the Code and Standards or testing policies has occurred, the member or candidate has the opportunity to reject or accept any charges and the
proposed sanctions. If the member or candidate does not accept the charges and proposed sanction,
the matter is referred to a panel composed of ______

Answer 12

Disciplinary Review Committee (DRC) members

Question 13

Sanctions imposed by CFA Institute may have significant consequences; they
include \_\_\_\_\_\_\_\_ (3)

Answer 13

public censure, suspension of membership and use of the CFA designation,
and revocation of the CFA charter

Question 14

The ________, a group consisting of CFA
charterholder volunteers from many different countries, is charged with maintaining and interpreting the Code and Standards and ensuring that they are effective

Answer 14

CFA Institute Standards of Practice Council (SPC)

Question 15

Since their creation in the ____, the Code and Standards have promoted
the integrity of CFA Institute members and served as a model for measuring the ethics of investment professionals globally, regardless of job function, cultural differences,
or local laws and regulations

Answer 15

1960s

Question 16

Members and Candidates have a duty of _____

Answer 16

loyalty to their clients and must act with reasonable care and exercise prudent judgment

Question 17

Members and Candidates must ______ and objectively with all clients when providing investment analysis, making investment recommendations,
taking investment action, or engaging in other professional activities

Answer 17

deal fairly

Question 18

Suitability - When Members and Candidates are in an advisory relationship with a
client, they must:

Answer 18

a. Make a reasonable inquiry
b. Determine that an investment is suitable
c. Judge the suitability of investments in the context of the client’s total
portfolio

Question 19

Members and Candidates must keep information about current, former, and
prospective clients confidential unless:

Answer 19

1. The information concerns illegal activities on the part of the client or
   prospective client
2. Disclosure is required by law
   3.The client or prospective client permits disclosure of the information

Question 20

Members and Candidates must develop and maintain appropriate _____
to support their investment analyses, recommendations, actions, and other
investment-related communications with clients and prospective clients.

Answer 20

records

Question 21

Investment transactions for clients and employers must have priority over _______

Answer 21

investment transactions in which a Member or Candidate is the beneficial
owner.

Question 22

Which of the following statements best describes an aspect of the Standards of
Professional Conduct?

Members and candidates are required to:

A ensure any portfolio mandate followed is fair, accurate, and complete.

B promptly disclose changes that might materially affect investment processes.

C have a reasonable and adequate basis for decisions about client
confidentiality.

Answer 22

B

Question 23

Within the Standards of Practice Handbook, CFA Institute

addresses ethical principles for the profession: _____ (5)

Answer 23

individual professionalism;

responsibilities to capital markets, clients, and employers;

ethics involved in investment analysis;

recommendations, and actions;

possible conflicts of
interest