Reading 1: Code of Ethics and Standards of Professional Condu 2011, center, style, label, class

1215

Session 1: Ethical and Professional Standards
Reading 1: Code of Ethics and Standards of Professional Conduct

LOS b: State the six components of the Code of Ethics and the seven Standards of Professional Conduct.

 

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

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

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

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

---

The Code states that a member shall “Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.” None of the other answers qualify.

luqian55

thanks a lot

tracylaubb

thx

1215

Which of the following is NOT part of the CFA Institute Code of Ethics. Members of CFA Institute will:

A) use reasonable care and exercise independent professional judgment.

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

C) recommend investments that maximize returns for a given level of risk.

---

Standard of Professional Conduct III(C), not the Code of Ethics, requires that investments be appropriate and suitable.

1215

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) 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.

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

---

This is a component of the Code of Ethics. Others pertain to the Standards of Professional Conduct.

1215

According to the CFA Institute Code of Ethics, CFA Institute members shall:

A) act with integrity, competence, diligence, respect, and in an ethical manner when dealing with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.

B) maintain knowledge and comply with all applicable laws, rules and regulations.

C) preserve the confidentiality of information communicated by clients, prospects, or employers concerning investment matters.

---

Acting with integrity, competence, diligence, respect, and in an ethical manner when dealing with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets is one of the six components of the Code of Ethics, whereas the other statements are part of the Standards of Professional Conduct.

1215

In accordance with Standard III (A) Loyalty, Prudence and Care, which of the following statements is least accurate? Members and Candidates should:

A) utilize client brokerage to the sole benefit of the client.

B) submit to clients, at least quarterly, itemized statements detailing all of the period’s transactions.

C) vote all proxies on behalf of clients in a responsible manner.

---

Because of the time and expense involved in voting a proxy, Members and Candidates are not required to vote every proxy. A cost benefit analysis can be performed to determine if it is necessary to vote a proxy.

1215

According to the Code of Ethics, a member reflects credit on the profession when a member:

A) practices in a professional and ethical manner.

B) consults with other members on a regular basis.

C) places the clients first.

---

Component four of the Code says that a member shall “Practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and the profession.” Neither of the other choices are implied by the Code.

1215

The first component of the Code of Ethics does NOT explicitly say that a CFA Institute member will act with which of the following?

A) Integrity.

B) Solemnity.

C) Competence.

---

Component one mentions all of these except solemnity.

1215

According to the Code of Ethics, when practicing in a professional and ethical manner the goal is to:

A) increase membership in CFA Institute.

B) reflect credit on members and the profession.

C) resolve conflicts between clients and employers.

---

The Code states that a member shall “Practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and their profession.”