Learning Module 2 Code of Ethics and Standards of Professional Conduct

Which is the primary purpose of the CFA Institute Professional Conduct Program (PCP)?

A member receives an e-mail from a regulator reporting possible misconduct by a colleague. According to the Handbook guidance, what should the member do first?

Which of the following best describes the relationship between the Code of Ethics and the Standards of Professional Conduct?

Which new standard was added in the 2023 revisions to the Code and Standards?

Under Standard I(A), when applicable law and the Code and Standards differ, a member must:

Which of the following most likely constitutes material nonpublic information under Standard II(A)?

Under II(A), which practice is permissible for an analyst using the mosaic approach?

Which of the following actions best demonstrates compliance with Standard I(B) Independence and Objectivity?

Which of the following is a recommended firewall element to prevent misuse of material nonpublic information?

Which behavior most likely violates Standard II(B) Market Manipulation?

A portfolio manager receives a client instruction to buy a speculative cryptocurrency product that conflicts with the client’s conservative IPS. What is the most appropriate immediate action?

Which action best meets the disclosure requirement under revised Standard V(B) Communication with Clients and Prospective Clients?

Which practice helps ensure fair dealing under Standard III(B) when allocating shares of an oversubscribed IPO among client accounts?

Which of these is required by Standard III(D) Performance Presentation?

A research analyst copies substantial material from another firm’s report into their firm’s published report without attribution. Which Standard is most directly violated?

Which procedure is recommended to help supervisors meet their obligations under Standard IV(C) Responsibilities of Supervisors?

Under Standard VI(A) Avoid or Disclose Conflicts, what is required when a conflict cannot reasonably be avoided?

Which of the following best exemplifies a violation of Standard V(A) Diligence and Reasonable Basis?

A member receives confidential quarterly sales figures from a supplier in confidence; the information is material. Under Standard II(A), which action is permitted?

Which statement best reflects the meaning of 'best execution' in the context of Standard III(A) Loyalty, Prudence, and Care?

An adviser claims in a brochure that their composite returned 20% annually for the past five years, but this excludes accounts that withdrew during poor years. Which Standard is implicated?

Which of the following is consistent with Standard I(E) Competence when a member's role changes to include ESG analysis?

Which is an appropriate firm practice to support Standard V(C) Record Retention?

Under Standard VI(B) Priority of Transactions, which trade must be filled first?

Which action best complies with Standard III(E) Preservation of Confidentiality?

Which of the following is a recommended firm policy to support Standard I(B) independence of research?

A member asks compliance whether they may accept a modest client gift worth EUR 50. Best practice under Standard I(B) is to:

Which of the following is most consistent with ethical use of expert networks under Standard II(A)?

A manager wishes to advertise a fund’s 10-year track record but wants to use a peer group index that is not comparable. Under Standard III(D) the manager should:

Which action best demonstrates compliance with Standard VII(B) Reference to CFA Institute and the CFA designation?

An analyst discovers an error in a previously distributed performance report that materially inflates returns. According to the Handbook, the analyst should:

Which of the following best describes the duty of loyalty under Standard III(A)?

Which firm-level practice most directly promotes ethical culture as described in the module conclusion?

Under Standard I(C) Misrepresentation, which social media behavior is most likely a violation?

Which of the following is consistent with Standard IV(B) Additional Compensation Arrangements?

Which best practice helps ensure suitability for retail clients under Standard III(C)?

Which of the following disclosures is required under Standard VI(C) Referral Fees?

Which practice helps a firm comply with Standard III(B) when issuing investment recommendations?

An adviser tells a prospective client only the services that benefit the adviser’s firm. Under Standard V(B), what is missing?

Which of the following actions would be a violation of Standard I(D) Misconduct?

Which of the following best exemplifies a firm’s proxy voting responsibility discussed under Standard III(A)?

Which practice is inconsistent with the concept of an ethical decision-making framework recommended in the module?

A member learns that a colleague has been selectively sharing draft research with favored clients before public release. Which Standards are implicated and what immediate step should the member take?

Which of the following is an appropriate response if a member discovers the firm is presenting an inaccurate performance composite that overstates returns?

Which of these best captures the FCA Institute's reason for emphasizing professions and codes of ethics in investment management?

Which of the following steps is part of the ethical decision-making framework outlined in the Handbook?

Which scenario most clearly requires dissociation under Standard I(A)?

Which of the following reflects best practice for handling firm-sponsored educational trips by issuers under Standard I(B)?

Under Standard V(B), which of these must be disclosed when communicating investment process to clients?

Which behavior exemplifies fulfilling the Standard I(E) Competence obligation over time?