Reading 1: Code of Ethics and Standards of Professional Con 2008

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CFA Institute Area 1-2: Ethical and Professional Standards
Session 1: Code of Ethics and Professional Standards
Reading 1: Code of Ethics and Standards of Professional Conduct
LOS b, (Part 1): State the six components of the Code of Ethics.

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Which of the following is NOT part of the CFA Institute Code of Ethics?

A) Contractual provisions.

B) Integrity.

C) Independent judgment.

D) Competence.

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According to the CFA Institute Code of Ethics, CFA Institute Members and Candidates must do all of the following EXCEPT:

A) not knowingly violate the securities acts and laws.

B) practice their profession in an ethical manner.

C) act with integrity and dignity.

D) exercise independent judgment.

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Which of the following is a component of the Code of Ethics?

A) Members shall not knowingly participate or assist in any violation of such laws, rules, or regulations.

B) Candidates in the CFA Program, as defined in the CFA Institute Bylaws, may reference their participation in the CFA Program, but the reference must clearly state that an individual is a candidate in the CFA Program and cannot imply that the candidate has achieved any type of partial designation.

C) Members shall not engage in any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects adversely on their honesty, trustworthiness, or professional competence.

D) Members shall use reasonable care and exercise independent professional judgment.

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Which of the following is a component of the Code of Ethics?

A) CFA Institute members may reference their membership only in a dignified and judicious manner. The use of the reference may be accompanied by an accurate explanation of the requirements that have been met to obtain membership in these organizations.

B) Members and candidates shall not engage in any conduct or commit any act that compromises the integrity of the CFA designation or the integrity or validity of the examinations leading to the award of the right to use the CFA designation.

C) Practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and their profession.

D) Members shall not copy or use, in substantially the same form as the original, material prepared by another without acknowledging and identifying the name of the author, publisher, or source of such material. Members may use, without acknowledgment, factual information published by recognized financial and statistical reporting services or similar sources.

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Which of the following is a component of the Code of Ethics? CFA Institute members shall:

A) disclose to their employer all matters that reasonably could be expected to interfere with their duty to their employer or ability to make unbiased and objective recommendations.

B) strive to maintain and improve their competence and the competence of others in the profession.

C) act for the benefit of their clients and place their clients' interests before their own.

D) consider the appropriateness and suitability of investment recommendations or actions for each portfolio or client.

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Which of the following is a component of the Code of Ethics? CFA Institute members shall:

A) use particular care in determining applicable fiduciary duty.

B) use reasonable care and exercise independent professional judgment.

C) not knowingly participate or assist in any violation of laws, rules, or regulations.

D) comply with any prohibitions on activities imposed by their employer if a conflict of interest occurs.

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According to the Code of Ethics, which of the following statements is FALSE? CFA Institute members are required to:

A) use reasonable care and exercise independent professional judgment.

B) practice and encourage others to practice in a professional and ethical manner.

C) maintain and improve their competence and strive to maintain the competence of others in the profession.

D) comply with the CFA Institute Performance Presentation Standards.

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According to the Code of Ethics, the professional judgment of a member should be:

A) dependent on that of his/her colleagues.

B) quick and timely.

C) independent.

D) guided by the SEC guidelines.

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Which of the following activities would be following a component of the Code of Ethics explicitly?

A) Maintaining a list of colleagues who have violated the CFA Institute standards.

B) Acting as a character witness for a colleague.

C) Consulting with colleagues about opinions you reach in your research.

D) Attending continuing education seminars on investing and inviting colleagues to come along.