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CFA Level I - 2.0 - 2020 > Standards > Flashcards

Standards Flashcards

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1
Q

what is knowledge of the law standard number?

A

standard 1 - A

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2
Q

Suitability is under which category?

A

Duties to clients - standard 3- C

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3
Q

What is: independence and objectivity standard number?

A

standard 1 - B

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4
Q

Under: Suitability, M&C are in a relationship with whom?

A

Clients

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5
Q

Duties to employers is which standard number?

A

Standard 4

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6
Q

Under: Market Manipulation, M&C must?

A

not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.

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7
Q

Under Responsibilities as a CFA Institute Member or CFA Candidate, standard b is?

A

Reference to CFA Institute, the CFA Designation, and the CFA Program

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8
Q

The 3 categories under Duties to employers are:

A

A- Loyalty
B- Additional Compensation Arrangements
C - Responsibilities of supervisors

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9
Q

what category is fair dealing?

A

Duties to clients - standard 3 - B

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10
Q

What is: standard 2 name?

A

Integrity of Capital Market

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11
Q

Under: Additional Compensation Arrangements, M&C must?

A

must not accept gifts, benefits, compensation, or consideration that competes with or might reasonably be expected to create a conflict of interest with their employer’s interest unless they obtain written consent from all parties involved.

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12
Q

What are the 3 categories under the: INVESTMENT ANALYSIS, RECOMMENDATIONS, AND ACTIONS, of standard 5

A

A-Diligence and Reasonable Basis

B- Communication with Clients and Prospective Clients

C- Record Retention

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13
Q

What standard is number 5

A

INVESTMENT ANALYSIS, RECOMMENDATIONS, AND ACTIONS

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14
Q

What standard is number 3

A

Duties to clients

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15
Q

Under: Misrepresentation, M&C must?

A

not knowingly make any misrepresentations relating to investment analysis, recommendations, actions, or other profes- sional activities.

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16
Q

What standard is number 4

A

Duties to employer

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17
Q

Under: Material Nonpublic information, M&C should?

A

who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.

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18
Q

What are the 2 categories under RESPONSIBILITIES AS A CFA INSTITUTE MEMBER OR CFA CANDIDATE

A

A- Conduct as Participants in CFA Institute Programs

B - Reference to CFA Institute, the CFA Designation, and the CFA Program

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19
Q

Under: Conduct as Participants in CFA Institute Programs,

What should M&C do?

A
  • must not engage in any conduct that compromises the reputation or integrity of CFA Institute or the CFA designation or the integrity, validity, or security of CFA Institute programs.
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20
Q

Under: Preservation of Confidentiality, M&C should do what?

A

must keep information about current, former, and
prospective clients confidential unless:
- The information concerns illegal activities on the part of the client or prospective client,
- Disclosure is required by law, or
- The client or prospective client permits disclosure of the information.

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21
Q

What standard is number 2

A

INTEGRITY OF CAPITAL MARKETS

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22
Q

Under standard 5 - C, Record Retention, M&C must?

A

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

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23
Q

Standard 4 - C is?

A

Responsibilities of supervisors

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24
Q

What is standard 7 - A

A

Conduct as Participants in CFA Institute Programs

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25
Q

Material nonpublic information is under which standard?

A

Standard 2 - integrity of capital market

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26
Q

Under: Independence and Objectivity, M&C must?

A
  • use reasonable care and judgment to achieve and maintain independence and objectivity in their professional activities.
  • must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity.
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27
Q

Standard 2 A - is named?

A

Material nonpublic information

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28
Q

What is standard 7?

A

RESPONSIBILITIES AS A CFA INSTITUTE MEMBER OR CFA CANDIDATE

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29
Q

Which category is performance presentation?

A

duties to clients - standard 3 - D

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30
Q

What standard is number 7

A

RESPONSIBILITIES AS A CFA INSTITUTE MEMBER OR CFA CANDIDATE

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31
Q

Under: Diligence and Reasonable Basis, M&C must?

A
  • Exercise diligence, independence, and thoroughness in analyzing investments, making investment recommendations, and taking investment actions.
  • Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment analysis, recommendation, or action.
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32
Q

Under: Performance presentation, M&C should do what?

A

When communicating investment performance information, Members and Candidates must make reasonable efforts to ensure that it is fair, accurate, and complete.

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33
Q

Under which situation must M&C not keep information about current, former, and prospective clients confidential?

A
  • The information concerns illegal activities on the part of the client or prospective clients
  • Disclosure is required by law
  • The client or prospective clients permit disclosure of the information
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34
Q

What is Conflict of Interest standard number?

A

6

35
Q

Under- Reference to CFA Institute, the CFA Designation, and the CFA Program,

what should M&C do?

A

When referring to CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA Program, Members and Candidates must not misrepresent or exaggerate the meaning or implications of membership in CFA Institute, holding the CFA designation, or candidacy in the CFA Program.

36
Q

Referral fee is under which standard?

A

Standard 6 (Conflict of Interest) - C

37
Q

Under: Priority of Transactions, M&C must?

A

Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.

38
Q

Standard 2 B- is named?

A

Market Manipulation

39
Q

Under: Knowledge of the law, M&C must?

A
  • must understand and comply with all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and Standards of Professional Conduct) of any government, regulatory organization, licensing agency, or professional association governing their professional activities.
  • In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation.
  • must not knowingly participate or assist in and must dissociate from any violation of such laws, rules, or regulations.
40
Q

Under: Fair Dealing, M&C should do what?

A

must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.

41
Q

Standard 4 A under duties to employer is named?

A

Loyalty

42
Q

Preservation of confidentiality goes in which standard?

A

Duties to clients - standard 3 - E

43
Q

Under: Standard 6-C (Referral Fees), M&C must?

A

must disclose to their employer, clients, and prospective clients, as appropriate, any compensation, consideration, or benefit received from or paid to others for the recommendation of products or services.

44
Q

Where do you categories Loyalty, prudence, and care?

A

Duties to clients - standard 3 - A

45
Q

Under: Communication with Clients and Prospective Clients, M&C must?

A
  • Disclose to clients and prospective clients the basic format and general principles of the investment processes they use to analyze investments, select securities, and construct portfolios and must promptly disclose any changes that might materially affect those processes.
  • Disclose to clients and prospective clients significant limitations and risks associated with the investment process.
  • Use reasonable judgment in identifying which factors are important to their investment analyses, recommendations, or actions and include those factors in communications with clients and prospective clients.
  • Distinguish between fact and opinion in the presentation of investment analysis and recommendations.
46
Q

What standard number is standard 1

A

Professionalism

47
Q

Under: Suitability, M&C should do what?

A

are in an advisory relationship with a
client, they must:

  • Make a reasonable inquiry into a client’s or prospective client’s investment experience, risk and return objectives, and financial constraints prior to making any investment recommendation or taking investment action and must reassess and update this information regularly.
  • Determine that an investment is suitable to the client’s financial situation and consistent with the client’s written objectives, mandates, and constraints before making an investment recommendation or taking investment action.
  • Judge the suitability of investments in the context of the client’s total portfolio.
48
Q

How many subsections does suitability - standard 3C has?

A

section 1 with 3 subs

section 2

49
Q

The 5 categories under duties to clients are:

A 
A - Loyalty, Prudence, and Care
B - Fair Dealing
C - Suitability
D - Performance Presentation
E - Preservation of Confidentiality
50
Q

Under: Standard 4-A loyalty, M&C should?

A

In matters related to their employment, Members and Candidates must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.

51
Q

Under which category is market manipulation?

A

Integrity of capital market: Standard 2 - B

52
Q

What standard is number 6

A

Conflict of interest

53
Q

Under: Responsibilities of Supervisors, M&C must?

A

must make reasonable efforts to ensure that any- one subject to their supervision or authority complies with applicable laws, rules, regulations, and the Code and Standards.

54
Q

Under knowledge of the Law: In the event of a conflict, what should M&C do?

A
  • must comply with the more strict law, rule, or regulation.
55
Q

The 4 categories under professionalism are:

A

A - Knowledge of the Law
B - Independence and Objectivity
C - Misrepresentation
D - Misconduct

56
Q

What is: misconduct standard number?

A

standard 1 - D

57
Q

What are the 3 Categories under conflict of interest?

A

A - Disclosure of Conflicts
B - Priority of Transactions
C - Referral Fees

58
Q

Under: Loyalty, Prudence, and Care, M&C should do what?

A
  • have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment.
  • must act for the benefit of their clients and place their clients’ interests before their employer’s or their own interests.
59
Q

Under: Misconducts, M&C must?

A

must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence.

60
Q

Standard 4 - B is?

A

Additional Compensation Arrangement

61
Q

Under Disclosure of Conflict, M&C MUST?

A
  • must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer.
  • must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.
62
Q

What is: misrepresentation standard number?

A

standard 1 - C

63
Q

Knowledge of the Law

A

Explain

64
Q

Independence and Objectivity

A

Explain

65
Q

Misrepresentation

A

explain

66
Q

Misconduct

A

explain

67
Q

Material Nonpublic Information

A

explain

68
Q

Market Manipulation

A

explain

69
Q

Loyalty, Prudence, and Care

A

explain

70
Q

Fair Dealing

A

explain

71
Q

Suitability

A

explain

72
Q

Performance Presentation

A

explain

73
Q

Preservation of Confidentiality

A

explain

74
Q

Loyalty

A

explain

75
Q

Additional Compensation Arrangements

A

explain

76
Q

Responsibilities of Supervisors

A

explain

77
Q

Diligence and Reasonable Basis

A

explain

78
Q

Communication with Clients and Prospective Clients

A

explain

79
Q

Record Retention

A

explain

80
Q

Disclosure of Conflicts

A

explain

81
Q

Priority of Transactions

A

explain

82
Q

Referral Fees

A

explain

83
Q

Conduct as Participants in CFA Institute Programs

A

explain

84
Q

Reference to CFA Institute, the CFA Designation, and the CFA Program

A

explain

CFA Level I - 2.0 - 2020 (4 decks)

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