What to know
Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Ethical and Professional Standards
Ethics and Trust in the Investment Profession practice questions
Ethics and Trust in the Investment Profession is part of CFA Level I Ethical and Professional Standards. Ethics questions test judgment under the Code and Standards, especially duties to clients, employers, markets, and the CFA Program. Use this page to review the controlling ideas, then work through 7 questions with answer explanations and common traps.
Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.
Practice this topicHow to practice
Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.
Review signal
Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.
Ethical and Professional Standards
Ethics and Trust in the Investment Profession
A portfolio manager discovers that a proposed marketing campaign is lawful in all jurisdictions where it will run, but it emphasizes survivorship-biased results and omits relevant risk limitations. Senior management argues that competitors use similar campaigns. The manager's most appropriate first ethical response is to:
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Ethics and Trust in the Investment Profession
Which of the following situations best illustrates conduct that is legal but potentially unethical?
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Ethics and Trust in the Investment Profession
Devika Rao, an analyst with a spotless conduct record, is told that her entire team's bonus depends on completing due diligence for a fund launch by Friday. Rao skips several planned checks of the fund's pricing model, telling herself that her teammates are counting on her. Rao's lapse is best explained by:
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Ethics and Trust in the Investment Profession
Marco Lindgren, a portfolio manager, receives a request from a major client to backdate a subscription document. Applying his firm's ethical decision-making framework, Lindgren identifies the relevant facts, stakeholders, and his duties, then immediately refuses the request and documents the outcome. A colleague later observes that Lindgren never sought guidance from compliance, never examined how pressure to keep the client might bias him, and never weighed alternative responses. Within an identify–consider–decide and act–reflect framework, Lindgren most likely performed which phase inadequately?
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Ethics and Trust in the Investment Profession
During a compliance training session, junior analyst Noa Peretz asks the instructor whether conduct that satisfies every applicable law and regulation is necessarily ethical. Which response by the instructor is most accurate?
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Ethics and Trust in the Investment Profession
Portfolio manager Viktor Halasz skips his firm's annual ethics workshop, telling a colleague, 'I have strong personal values, so whatever pressures come up, I will make the right call without needing a framework.' Halasz's attitude best illustrates which challenge to ethical behavior?
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Ethics and Trust in the Investment Profession
Adviser Lucia Fontana receives a troubling request from a large client. Working through her firm's ethical decision-making framework, she identifies the relevant facts, her duties, and the affected stakeholders; she considers how her approaching bonus deadline might be biasing her judgment; she consults her compliance officer for independent guidance; and she then makes and executes her decision, closing the file the same day. Which element of the ethical decision-making framework has Fontana most likely omitted?
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