7、Hui Chen, CFA, develops marketing materials for an investment fund he founded three years ago. The materials show the 3-, 2- and 1-year returns for the fund. He includes a footnote that states in small print. "Past performance does not guarantee future returns." He also includes a separate sheet showing the most recent semi-annual and quarterly returns, which have been neither audited nor verified. According to the Standards of Practice Handbook, has Chen violated any Standards of Practice?

A. No.

B. Yes, because he included un-audited and unverified results.

C. Yes, because he did not adhere to the global investment performance standards.

D. Yes, because he should not have used a footnote to disclose important information.

Correct answer = A

Standards of Practice Handbook, 9^th edition (CFA Institute, 2005), p. 75
Standard III (D)
2008 Modular Level I, Vol. 1, pp. 64, 119-122
Study Session 1-2-a
demonstrate a thorough knowledge of the Code of Ethics and Standards of Professional Conduct by applying the Code and Standards to specific situations presenting multiple issues of questionable professional conduct
The Standards require that members make reasonable efforts to make sure that performance information is fair, accurate, and complete. They do not require compliance with Global Investment Performance Standards (GIPS), auditing, or verification.