cfalevel1QB

According to the Code of Ethics, which of the following statements is NOT correct? CFA Institute members are required to:

A) use reasonable care and exercise independent professional judgment.

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

C) comply with the CFA Institute Performance Presentation Standards.

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The CFA Institute-PPS are voluntary standards for the industry. Firms are not required to comply with these standards when presenting performance. The other statements are each components of the CFA Institute Code of Ethics.

cfalevel1QB

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

A) guided by the SEC guidelines.

B) dependent on that of his/her colleagues.

C) independent.

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The Code of Ethics states that the CFA Institute member shall “Use reasonable care and exercise independent professional judgment.” None of the other answers resemble anything in the Code.

cfalevel1QB

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

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

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

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

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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.

cfalevel1QB

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

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

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

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

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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.

cfalevel1QB

A member or candidate who rejects a disciplinary sanction proposed by a Designated Officer of the Professional Conduct Program:

A) will be suspended from membership or participation in the CFA Program.

B) will typically not be subject to further disciplinary procedure unless a new investigation is initiated.

C) may request an appeal to a hearing panel.

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A member or candidate may accept a proposed disciplinary sanction or request an appeal to a hearing panel.

cfalevel1QB

Which of the following correctly lists disciplinary sanctions in order of severity, lowest to highest, that the Designated Officer may take as a result of an investigation?

A) Suspension of the CFA designation, public censure, revocation of the CFA designation.

B) Public censure, suspension of the CFA designation, revocation of the CFA designation.

C) Suspension of membership, revocation of membership, public censure.

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Public censure is less severe than suspension from using the CFA designation, and suspension is less severe than revocation.

cfalevel1QB

With respect to the CFA Institute enforcement of the Code and Standards, which of the following is NOT a possible disciplinary sanction?

A) Private censure.

B) Refusing to allow a candidate for the CFA designation to take one of the exams.

C) Payment of a fine.

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CFA Institute does not impose fines. All of the other choices are possible sanctions. CFA Institute may suspend a candidate from further participation in the CFA program.

cfalevel1QB

With respect to filing complaints concerning the professional conduct of a CFA Institute member, which of the following is CORRECT?

A) Anyone can write the Professional Conduct Program staff with a complaint concerning the conduct of any member.

B) Only other members can write the Professional Conduct Program staff with a complaint concerning the conduct of another member.

C) Anyone can write the Standards and Policy Committee staff with a complaint concerning the conduct of any member.

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This is from page ix of the Standards of Practice Handbook. Complaints may be filed by anyone and are to be written to the Professional Conduct Program staff.

cfalevel1QB

Which of the following is least accurate regarding reasons for imposing a summary suspension upon covered persons?

A) Failure to return the annual professional conduct statement.

B) Disbarment under securities laws.

C) Misdemeanor charge for the possession of illegal narcotic substances.

A single misdemeanor conviction for possession of illegal narcotics is not grounds for a summary suspension.

cfalevel1QB

Steve Jones is a member of CFA Institute but has not earned the CFA designation yet. CFA Institute is investigating Jones’ activities. If Jones declines to cooperate, he:

A) is within his right only because it could be self incriminating.

B) is within his right only because he does not have the CFA designation yet.

C) could be summarily suspended from membership.


Refusing to cooperate with a CFA Institute investigation of a member’s behavior could lead to suspension of membership. If the member has earned the right to use the CFA designation, the punishment could be suspension of use of the designation.