Learning Module 1 Ethics and Trust in the Investment Profession

Which description best captures the definition of ethics used in this module?

Which is NOT a characteristic by which professions establish public trust, according to the module?

An analyst intentionally omits a material risk in a research report to increase the odds the company will hire the firm for investment banking business. Which outcome best aligns with the module's discussion of consequences?

Which statement best illustrates the module’s point about the relationship between law and ethics?

Which of the following is an example of a situational influence described in the module that can impair ethical judgement?

An employee thinks, "I am honest so I would never do something unethical." According to the module, this belief most closely reflects which bias?

Which organizational practice does the module warn can unintentionally promote a "check-the-box" mentality rather than ethical judgement?

According to the module, which single action best supports building a strong ethical culture in a firm?

Which of the following best describes the first phase of the ethical decision-making framework presented in the module?

A junior analyst drafts an email containing confidential IPO analysis and considers sending it to two outside industry contacts to get feedback. Applying the module’s framework, which step should the analyst take before sending the email?

Which practice did the module recommend firms adopt to limit misuse of material nonpublic information?

An analyst compiles a 'mosaic' from public facts, vendor data, and expert conversations (nonmaterial) and concludes the firm will miss earnings. According to the module, which statement is true?

Which action would most likely reduce the risk that analysts are pressured by an investment bank’s corporate-finance business?

A fund manager sends lucrative gifts to a pension trustee who can influence manager selection. Under the module guidance, which standard is most directly implicated?

Which behavior is most consistent with the module’s recommendation about accepting client gifts?

A small fund reports a 10-year composite return but excludes several large accounts that left the firm during the period without disclosing it. This practice best illustrates which violation discussed in the module?

Which control does the module recommend to detect and prevent insider-trading risk within a firm?

Which of these is a correct interpretation of the module’s view on whistleblowing?

Under the module’s guidance, what is the preferred compensation structure for independent analysts doing issuer-paid research to avoid conflicts?

Which of the following best reflects the module’s guidance about maintaining competence (Standard I(E))?

Which choice best captures the module’s advice on use of social media by investment professionals?

An adviser recommends an investment that is legally allowed but more expensive than similar alternatives and does not disclose this to the client. Which principle from the module is breached?

Which of the following best describes the module’s recommended approach when a professional discovers their firm is using deceptive marketing to attract clients?

A portfolio manager must choose between two suitable investments: one yields slightly higher fees to the firm but the other is marginally better on total cost to the client. Under the module’s guidance, what should the manager do?

Which of the following best reflects the module’s position on the role of professional bodies like CFA Institute?

Which of the following is a primary reason the module gives for why ethics matters in capital markets?

A compliance department designs a new firewall but distributes the watch list to all employees. According to the module, why is this problematic?

Which best reflects the module’s guidance on performance benchmarks for a manager’s track record?

According to the module, which factor most often causes otherwise well-intentioned people to act unethically?

Which recommendation would the module consider best practice when a firm faces potential conflicts between research and investment banking?

Which step is part of the module’s recommended ethical decision process after acting on a choice?

A firm claims compliance with CFA Institute Code and Standards on its marketing materials. According to the module, the firm should:

Which of the following best summarizes the module’s guidance on disclosure of conflicts of interest?

A manager recommending investments to a retail client should first:

Which of the following actions would be a violation of Standard II(B) on market manipulation as described in the module?

Which of these is an example of an appropriate firm-level response to prevent plagiarism and misrepresentation in research?

A portfolio manager running discretionary mandates places a large personal trade ahead of client trades in the same security. According to the module, this most directly violates which principle?

Under the module’s examples, which action is most consistent with preserving client confidentiality (Standard III(E))?

An investment firm advertises the firm’s past returns but omits that the composite excluded accounts that left during the period. Under module guidance, what should be done?

Which measure does the module recommend for a firm that wants to ensure research objectivity from analysts?

Which of the following most accurately captures the module’s guidance for proxy voting responsibilities?

According to the module, what is the role of continuing professional development in professionalism?

A junior analyst uses a competitor’s published research without attribution in his firm’s report. Which module principle is violated?

Which of the following best matches the module’s advice when faced with conflicting laws and professional standards across jurisdictions?

Which action is an example of behavior that the module identifies as misconduct under Standard I(D)?

A buy-side manager asks a sell-side analyst to delay publication of a negative report until after the manager liquidates a short position. According to the module, which concept is violated if the analyst complies?

Which of these best describes a firm-level policy the module endorses to support Standard III(A) duties?

Which practice relating to issuer-sponsored research would the module consider acceptable?

An adviser managing multiple client accounts must allocate a scarce IPO allotment. According to the module, which principle should guide allocation?

Which of the following best summarizes the module’s advice about how ethical decision-making frameworks help professionals?