MCQ Vol. 6 LM2 Flashcards
P1
The Standards of Practice Handbook provides guidance:
A. regarding the penalties incurred as a result of ethical violations.
B. to which all CFA Institute members and candidates must adhere.
C. through explanatory material and examples intended to be all inclusive.
B
P2
Which of the following statements best describes an aspect of the Professional Conduct Program process?
A. Inquiries are not initiated in response to information provided by the media.
B. Investigations result in Disciplinary Review Committee panels for each case.
C. Investigations may include requesting a written explanation from the member or candidate.
B
P3
A current Code of Ethics principle reads in full, “Promote the integrity:
A. and viability of the global capital markets.”
B. of and uphold the rules governing capital markets.”
C. and viability of the global capital markets for the ultimate benefit of society.”
C
P4
As stated in the revised 11th edition, the Standards of Professional Conduct:
A. require supervisors to focus on the detection and prevention of violations.
B. adopt separate ethical considerations for programs such as CIPM and
Investment Foundations.
C. address the risks and limitations of recommendations being made to clients.
A
P5
According to the Code of Ethics, members of CFA Institute and candidates for the CFA designation must:
A. maintain their professional competence to exercise independent professional judgment.
B. place the integrity of the investment profession and the interests of clients above their own personal interests.
C. practice in a professional and ethical manner with the public, clients, and others in the global capital markets.
B
P6
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.
B
P7
Which of the following responses most completely represents an ethical principle of CFA Institute as outlined in the Standards of Practice Handbook?
A. Individual professionalism
B. Responsibilities to clients and employers
C. Ethics involved in investment analysis and recommendations
A
P8
A CFA Institute member would violate the standard for material nonpublic information by:
A. conducting price distortion practices.
B. inappropriately causing others to act.
C. inadequately maintaining investment records.
B
P9
According to the Duties to Clients standard, suitability requires members and candidates in an advisory relationship with a client to:
A. place their clients’ interests before their own interests.
B. consider investments in the context of the client’s total portfolio.
C. not knowingly make misrepresentations relating to recommendations.
B
P10
As part of the Duties to Clients standard, members and candidates must:
A. document client financial constraints after an initial investment action.
B. maintain an equal balance of interests owed to their clients and employers.
C. deal fairly and objectively with all clients when engaging in professional
activities.
C
P11
The Duties to Employers standard states that members and candidates must not:
A. accept any gifts that might compromise their independence and objectivity.
B. deprive their employer of their skills and abilities as related to their
employment.
C. accept compensation competing with their employer’s interest and with the written consent of all parties involved.
C
P12
The Investment Analysis, Recommendations, and Actions standard states that members and candidates must:
A. find an investment suitable for their client before making a
recommendation.
B. make reasonable efforts to ensure that performance presentation is fair, accurate, and complete.
C. distinguish between fact and opinion in the presentation of investment analysis and recommendations.
C
P13
Based on the Conflicts of Interest standard, members and candidates must:
A. disclose, as required by law, those conflicts interfering with their professional duties.
B. disclose, as appropriate, any benefit paid to others for the recommendation of products.
C. seek employer approval before prioritizing their investment transactions over those clients.
A
The Responsibilities as a CFA Institute Member or CFA Candidate Standard explicitly states a requirement regarding:
A. loyalty.
B. responsibility of supervisors.
C. reference to the CFA Program.
A
