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Which of the following is least likely an appropriate use of the CFA designation?

A)	Jeremy Salyers, as a CFA charterholder, expects to outperform the market because CFA charterholders have on average outperformed their peers.

B)	Jeremy Salyers, CFA.

C)	Jeremy Salyers has earned the CFA designation by passing three exams, all three on his first attempts.

Members may not over-promise their performance as CFA charterholders. They may follow their name with the designation and describe, factually, the requirements for becoming a charterholder.

Jason Jones, a stock broker who has completed Level 1 of the CFA program and is registered for the next Level 2 CFA exam, may:

A)	state that he is a Level 2 candidate in the CFA Program.

B)	use the Level 1 CFA designation since he has passed the Level 1 exam.

C)	not mention that he is involved in the CFA Program until he has passed all three levels.

Jason may refer to his participation in the program but must state that he is a candidate and specify the level of the exam for which he is registered. There is no partial designation.

Ralph Lim and Susan Bland have both passed Level I of the CFA Program. Both are currently enrolled to sit for Level II. Lim's business card reads, "Ralph Lim, CFA Level I." Bland's resume states, "Level II Candidate in the CFA Program." According to CFA Institute Standards of Professional Conduct involving use of the professional designation:

A)	Lim violated the Standard, but Bland did not.

B)	Both Lim and Bland violated the Standard.

C)	Bland violated the Standard, but Lim did not.

There is no designation for someone who has passed Level I, Level II, or Level III of the CFA examination. Candidates may state, however, that they have completed Level I, II, or III, as the case may be, in the CFA Program. Thus, Lim violated the Standard, but Bland did not.

The only appropriate use of the designation is “I am a CFA charterholder.” You cannot use the designation as a noun (as in “I am a CFA”) and you cannot use the designation in the company name.

Which of the following is an appropriate statement for a Level II CFA candidate to make?

A)	I passed the Level I CFA exam last year.

B)	I am a Level II CFA.

C)	I am a Level I CFA charterholder.

The only appropriate statement is “I passed the Level I CFA exam last year.” It is a factual statement and does not imply a partial designation, which does not exist.

Janet Olson, CFA, is an analyst at Quantech Associates. Olson attended a conference at which Brian Wright presented several proprietary computerized spreadsheets that he had developed to value high-tech stocks. While at the conference, Olson copied the spreadsheets without Wright’s knowledge. Later, Olson made several minor changes to Wright’s initial model. After testing the revised model, Olson was impressed with the results. As inputs for the model, she used factual materials supplied by Moody’s Investors Service, a recognized financial and statistical reporting service. Olson wrote a research report describing the revised model and its results and distributed the report to Quantech’s clients. According to CFA Institute Standards of Professional Conduct, which of the following actions is Olson required to take? Olson is:

A)	required to seek authorization from Wright to copy the spreadsheets and acknowledge Wright for developing the initial model and Moody's Investors Service as the source of the data.

B)	required to acknowledge Moody's Investors Service as the source of the data but is not required to seek authorization from Wright to copy the spreadsheets or to acknowledge Wright for developing the initial model.

C)	required to seek the authorization from Wright to copy the spreadsheets, acknowledge Wright for developing the initial model but is not required to acknowledge Moody's Investors Service as the source of the data.

To comply with Standard I(C) Misrepresentation, Olson should have gotten the authorization from Wright to copy the spreadsheets. The prohibition against plagiarism requires that Olson identify Wright as the source of the initial model. However, the Standard permits publishing factual information from Moody's Investors Service without acknowledgment because Moody's is recognized as a source of factual materials.

All of the following situations violate Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program, EXCEPT:

Karen Wright received her CFA charter in 1980. In 2001, she stopped paying her annual CFA Institute dues. During her retirement speech in 2002, Wright said, "Although I am no longer an active CFA charterholder, I was awarded the right to use the CFA designation in 1980 and maintained active membership in CFA Institute for 20 years."

B)	Barney Latrell, when introducing himself to a prospective client, says, "I completed my CFA in 1995, which required passing three six-hour examinations over a three year period."

C)	John Cabell has satisfied all the requirements imposed by CFA Institute for the right to use the Chartered Financial Analyst designation. His business cards say: John Cabell, C.F.A.

Wright’s statement did not violate Standard VII(B). Her right to use the CFA designation was suspended when she stopped paying dues but her statement is a matter of fact. Cabell’s violated Standard VII(B) because he improperly used the CFA designation on his business card. Proper usage of the CFA designation on his business card would be: John Cabell, CFA or John Cabell, Chartered Financial Analyst. Latrell violated Standard VII(B) by using the CFA designation as a noun. The CFA mark must be used as an adjective. Latrell could have stated, “I was awarded the CFA charter in 1995.”

An analyst has not paid his CFA Institute dues for several years but has filed a professional conduct statement annually. Which of the following statements is CORRECT regarding his status with CFA Institute? The analyst:

A)	cannot refer to ever having been a member.

B)	is still an active member.

C)	is no longer an active member.

Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program, applies. In order to use the CFA designation, the member must pay annual dues and submit a yearly Professional Conduct Statement.

Judy Albert and Bob Tye, who recently started their own investment advisory business, plan to take the Level III CFA examination next year. Albert's business card reads, "Judy Albert, CFA Candidate." Tye has not put anything about the CFA on his business card. However, the firm's promotional materials describe the CFA requirements and indicate that Tye participates in the CFA program and has completed Levels I and II. According to CFA Institute Standards of Professional Conduct:

A)	Albert has violated the Standards but Tye has not.

B)	Both Albert and Tye have violated the Standards.

C)	Neither Albert nor Tye has violated the Standards.

On letterheads and business cards and in directory listings, only the mark CFA or the words Chartered Financial Analyst should appear after the charterholder's name.

John Johnson, portfolio manager at Sunshine Investments, has passed all three levels of the CFA? Program and has completed his work experience requirements. He expects to receive his charter in the near future. He includes the following statement in his firm’s brochure: “Johnson has passed all three levels of the exam and has completed the required work experience for the CFA Charter. He is eligible for the CFA Charter and expects to receive the charter in the near future. Over the years, he has demonstrated a superior performance and his CFA Charter will be rightfully awarded.” Johnson has:

A)	violated CFA Institute Standards of Professional Conduct because he advertised the CFA Charter before actually obtaining it.

B)	not violated CFA Institute Standards of Professional Conduct because he met all disclosure requirements.

C)	violated CFA Institute Standards of Professional Conduct because he implied superior performance that would be linked to the CFA Charter.

According to Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program, Johnson may indicate that he has completed the requirements and is eligible for the CFA charter along with an accurate explanation of the requirements. However, he may not imply that the designation would mean superior performance capabilities.

A CFA Institute member puts the following statement on her resume: “I passed each level of the CFA exam on the first try.” Is this a violation of Standard VII(B)?

A)	Yes, because she incorrectly refers to the CFA exam.

B)	No, because it is a statement of fact.

C)	Yes, because saying she passed exams on the first try is not appropriate.

The statement is not a violation because it is a fact. However, the member must not go on to claim superior performance.

Ted Willis received his CFA designation in 1998 and was employed as an investment counselor until 2003. During the past several years, Willis has been out of work because of a serious illness. He also failed to pay his annual CFA Institute dues during the current year. Willis has now recovered and accepted a position with an investment advisory firm. His new business card says, “Ted Willis, CFA.” As part of his job with his new firm, Willis uses PowerPoint? to make presentations to groups of prospective clients. He obtained some of these PowerPoint? slides from web sites, but removed the copyright notice before showing the slides to prospective clients.

Which of the following statements about Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program, and Standard I(C), Misrepresentation, is most accurate? Willis:

A)	violated Standard VII(B) but he did not violate Standard I(C).

B)	violated both Standard VII(B) and Standard I(C).

C)	did not violate either Standard VII(B) or Standard I(C).

Willis violated Standard VII(B) because his right to use the CFA designation was suspended when he stopped paying CFA Institute dues. Thus, he can no longer use the CFA designation on his business card. Willis also violated Standard I(C) because he was guilty of plagiarism. He inappropriately used copyrighted material, which provided the impression that such material was his own.

When Wes Smith first joined Advisors, Inc., he was excited that all the analysts at the firm had the CFA designation. In letters to prospective clients, he states that this ensures that Advisors can provide better service than their competitors. With respect to Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program, this is:

A)	a violation because he mentions the CFA designation in the letter.

B)	a violation because he cannot guarantee better service.

C)	a violation for both mentioning the CFA designation and saying the firm can guarantee better service.

According to Standard VII(B), the analyst cannot guarantee better service. Smith can mention the fact that all analysts have the designation, but he is limited in what he can say with respect to this fact. He could say, for example, that this means the analysts all had to take and pass three rigorous exams.

All of the following statements in promotion of your services are in violation of CFA Institute Standards of Practice handbook EXCEPT:

A)	I guarantee under my management that you will receive returns in excess of the market index average.

B)	I passed Level II of the CFA Program in 2003.

C)	based upon my research, you will achieve a 20% compound annual rate of return on small cap stocks over the next 5 years.

Candidates may refer to the CFA level(s) passed and the associated dates as long as a partial designation is not implied. They may not guarantee or promise a given level of return.

Robert Hopkins has earned the right to use the CFA designation and wants to indicate this on his business card. According to CFA Institute Standards of Professional Conduct, which of the following is the proper use of the professional designation on his business card?

A)	Robert Hopkins, cfa

B)	Robert Hopkins, CFA Charterholder

C)	Robert Hopkins, C.F.A.

The CFA designation should always be capitalized and shown without periods. The CFA designation should not be referred to as a degree. Placing the designation "CFA" or "CFA Charterholder" after one's name on a resume, business card, brochure, or other published material is appropriate.

Nichole Zeller and Randy Toffler have both passed Level II of the CFA Exam Program and have registered for Level III. Zeller circulates a resume stating that she is a candidate for the CFA designation and has passed Level II of the CFA program. Toffler circulates a resume stating that he is a CFA II. Which of the following statements is CORRECT?

A)	Only Toffler has violated the Code of Standards.

B)	Only Zeller has violated the Code of Standards.

C)	Both Zeller and Toffler have violated the Code of Standards.

The Code and Standards permit an individual to state that he or she is a candidate for the CFA designation as long as the person is registered for the next CFA exam. The same individual may state the fact that he or she has passed Level I or II of the CFA program. There is no partial designation, such as CFA II.

Jake Miles, CFA, includes the following phrase on his business card: “Jake Miles is your trusted local CFA.” Is this a violation of Standard VII(B)?

A)	Yes, because he cannot put the initials "CFA" on his business card.

B)	Yes, because he uses CFA as a noun.

C)	No, because his CFA Institute membership indicates that he is indeed trustworthy.

The initials CFA cannot be used as a noun. The initials can appear on a business card but cannot be used to exaggerate the meaning or implications of membership.

Lucy Ackert and Chris Brown prepared the following information to be included in the promotional materials of their employer, Lofton Securities.

Are the promotional materials prepared by Ackert and Brown fully consistent with the Standards of Professional Conduct?

A)	Ackert: No. Brown: No.

B)	Ackert: Yes. Brown: No.

C)	Ackert: No. Brown: Yes.

Neither statement is fully consistent with Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program. The CFA designation must always be used as an adjective and never as a noun as Ackert used in her promotional description. Correct use of the CFA designation would be: “Lucy Ackert is one of five CFA charterholders at Lofton Securities.” No designation exists for someone who has passed Level I of the CFA examination. Thus, Brown’s statement saying that he “holds a CFA Level I designation” represents incorrect use. A correct statement would be: “Chris Brown passed Level I of the CFA examination in 2001.”

Julie Stades retired several years ago and relinquished her membership in CFA Institute. She had the CFA designation up until then. She has decided to go back to work and puts the following statement on her resume: “I earned the CFA designation 10 years ago.” Is this a violation of Standard VII(B)?

A)	Yes, she has used the letters "CFA" in an undignified manner.

B)	Yes, because she uses "CFA" as a noun.

C)	No, as long as she does not indicate she currently has the designation.

Stades is allowed to state that she earned the designation as long as she does not infer that she currently has the designation. The letters “CFA” are only to be used as an adjective, and she does that.

All of the following are required for a CFA Institute member to maintain his or her active status EXCEPT:

A)	remit a completed Professional Conduct Statement on an annual basis.

B)	paying membership dues to CFA Institute on an annual basis.

C)	Passing each exam in no more than two tries.

Passing each exam in two or fewer tries is not required to maintain active status as a member of the CFA Institute. CFA Institute imposes both of the other choices.

During 2004 Nancy Arnold received an undergraduate business degree with a management major and completed all requirements for the CFA designation imposed by CFA Institute. She is applying for employment at several brokerage firms. Her resume states, “I was awarded the CFA degree in 2004 by CFA Institute.” Her resume also states that she graduated “with honors” and majored in finance. Her grade point average was 3.48 but “with honors” requires a 3.50 grade point average.

Which of the following statements about Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program, and Standard I(C), Misrepresentation, is CORRECT? Arnold:

A)	violated Standard I(C) but she did not violate Standard VII(B).

B)	did not violate either Standard VII(B) or Standard I(C).

C)	violated both Standard VII(B) and Standard I(C).

Arnold violated Standard VII(B). The CFA designation should not be referred to as a degree. Arnold also violated Standard I(C) because her claim that she graduated “with honors” is not true.

Which of the following statements is a violation of Standard VII(B) if it is included on a CFA charterholder’s resume?

A)	My earning the CFA designation indicates my superior ability.

B)	Both of these are violations of Standard VII(B).

C)	My earning the CFA designation indicates my desire to maintain high standards.

A CFA charterholder may not make claims about how earning the designation proves superior capabilities. Saying "my earning the CFA designation indicates my desire to maintain high standards" is allowed because it is a factual statement