Title Ethics - Question.pdf ✅

CFA Program Level I for February 2024 1 Ethics 1. Which of the following statements most likely reflects one of the six components of the CFA Code of Ethics? Candidates must: A. place the integrity of the investment profession above their own interests. B. promote the viability of the global capital markets for their employer's benefit. C. ignore unprofessional conduct displayed by others within the profession. 2. A profession is most likely described as a group of people that: A. has a common level of basic knowledge about a particular subject. B. monitors its members based on an agreed-oncode of ethics. C. puts the interests of its members first. 3. Most societies would least likely consider ethical principles to include: A.justice. B. duplicity. C. diligence. 4. Tibor Figeczky, CFA, is an equity trader at Global Investment Bank (GB). Figeczky traded the bank's investment portfolio profitably for the past three years and earned significant bonuses for his efforts. Subsequently, internal auditors of GB formally accused Figeczky of exceeding his trading authority and engaging in unauthorized trades. According to the CFA Institute Code of Ethics and Standards of Professional Conduct, Figeczky should most likely A. disclose the complaint to CFA Institute. B. refuse further bonuses until the issue is resolved. C. request a temporary suspension of his CFA Institute membership.
CFA Program Level I for February 2024 2 5. Lisa Hajak, CFA, specialized in research on real estate companies at Cornerstone Country Bank for the past twenty years. Hajak recently started her own investment research firm, Hajak Investment Advisory. One of her former clients at Cornerstone asks Hajak to update a research report she wrote on a real estate company when she was at Cornerstone. Hajak updates the report, which she had copied to her personal computer without the bank's knowledge, and replaces references to the bank with her new firm, Hajak Investment Advisory. Hajak also incorporates the conclusions of a real estate study conducted by the Realtors Association that appeared in the Wall Street Journal. She references the Journal as her source in her report. She provides the revised report free of charge along with a cover letter for the bank's client to become a client of her firm. Concerning the reissued research report, Hajak least likely violated the CFA Institute Standards of Professional Conduct because she: A. solicited the bank's client. B. did not obtain consent to use the bank report. C. did not cite the actual source of the real estate study. 6. Dennis Kim, CFA, works at Century Growth Partners (CGP) where he manages an investment account for his client Amelia Frost. Frost tells Kim to invest one percent of her portfolio in biotech stocks. Kim believes such an investment is inconsistent with Frost's investment policy statement. CGP has no policy regarding execution of unsolicited trading requests. Kim discusses his concerns with Frost, but she does not change her instruction. Without amending Frost's investment policy statement, Kim executes the trade afterward. Has Kim violated the Standards? A. No B. Yes, because Kim executes an unsuitable trade for Frost C. Yes , because Kim does not change Frost's investment policy statement before executing the trade 7. Which of the following and care? Members should: is a recommended procedure for compliance with the Standard relating to loyalty, prudence, A. eliminate all actual and potential conflicts of interest. B. make their clients aware of all forms of manager compensation.
CFA Program Level I for February 2024 3 C. submit to each client, at least annually, an itemized statement showing the funds and securities in custody. 8. According to the Standards, a member who is asked to produce an issuer-paid research report is required to: A. avoid cash compensation. B. disclose the nature of their compensation in the report. C. decline to write the report if the member's firm provides investment banking services to the issuer. 9. Ann Jules, CFA, discovered that her employer, Plutus Investments Inc. (PII), inflates investment performance in PII's marketing brochure. In accordance with firm policy, Jules uses PII's marketing brochure to present to prospective clients. In addition, Jules emails stock recommendations to her clients in capsule form and offers additional information only upon request. Jules has most likely violated the Standards: A. by emailing stock recommendations to her clients in capsule form. B. only by using Pil's marketing brochure to present to prospective clients. C. both by emailing stock recommendations to her clients in capsule form and by using PII's marketing brochure to present to prospective clients. 10. Maria Jennings, CFA, overhears the CEO of United Retail saying that the quarterly report to be released next week will miss analysts' expectations. Jennings immediately calls her brother who owns the stock to tell him what she overheard. One week later, Jennings writes a report on another company, KTD retail. She uses public and nonmaterial nonpublic information for her analysis to issue a "buy" recommendation. Has Jennings most likely violated the Standards? A. No B. Yes, by calling her brother to tell him what she overheard C. Yes, by using public and nonmaterial nonpublic information for her analysis to issue a "buy" recommendation
CFA Program Level I for February 2024 4 11. According to the Standards, which of the following is most likely considered material nonpublic information? A. The recent execution of a large buy order from a hedge fund. B. Significant legal challenges revealed at an internal meeting of the company's management. C. Recent increases in a company's board remuneration discussed at the annual general meeting. 12. According to the Standard relating to fair dealing, when members disseminate investment recommendations, they are most likely required to make every effort to treat individual clients in a(n): A. fair and equal manner. B. fair and impartial manner. C. equal and impartial manner. 13. According to the recommended procedure for compliance with the Standard relating to fair dealing, a member who works in a large firm should: A. offer different levels of service to clients selectively based on the clients' B. disclose to clients and prospective clients how she selects accounts to participate in an order. C. inform all firm staff of the content of upcoming investment needs. investment recommendations to assure that all clients' investment needs are met. 14. Which of the following statements is accurate according to the Standards? ● Statement 1 :A member, prior to leaving his current employer, may contact potential clients for purposes of soliciting their business for their new employer. outside of normal working hours to ● Statement 2: A member, while still employed, is free to make arrangements apply for a license with the local regulator to set up a competing business. A. Statement 1 only. B. Statement 2 only.