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 Application practice questions
Ethics Application 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 8 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 Application
Which of the following actions by an investment professional is least likely to violate the CFA Institute Standards of Professional Conduct?
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Ethics Application
Two days after publishing a research report, analyst Ibrahim Diallo discovers a spreadsheet error that overstated his price target by 15%, although his buy recommendation itself would NOT change. Several clients have already traded on the report. Diallo's most appropriate action is to:
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Ethics Application
Ingrid Halvorsen, a portfolio manager, serves without pay on the investment committee of a charitable foundation that is also a fee-paying advisory client of her firm. At its next meeting, the committee will vote on whether to renew her firm's advisory mandate. Halvorsen's most appropriate course of action is to:
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Ethics Application
A compliance officer examining one week of activity by adviser Tomás Aguilar notes three items. Which item is least likely a violation of the CFA Institute Standards of Professional Conduct?
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Ethics Application
A firm's sales head pressures analysts to issue favorable ratings before a banking pitch. An analyst discloses the pressure in small print but changes her rating without analytical support. The most directly violated Standard is:
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Ethics Application
Under a tight publication deadline, research director Malik Sowah instructs analyst Dana Petrova to add her name and signature to a completed report on a chemicals producer so it can be released within the hour. Petrova has NOT read the report or examined any of its supporting analysis, but she signs, and the report is distributed to clients under her name. Petrova's own conduct most directly implicates which Standard?
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Ethics Application
Portfolio manager Owen Gallagher posts on his public social media account that a small biotechnology stock is 'dramatically undervalued,' accurately summarizing research he genuinely performed and believes. He does NOT mention that he personally holds a sizable position in the stock, and the share price rises 12% over the following week as the post circulates. Gallagher's omission most directly implicates which Standard?
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Ethics Application
Competing for a large institutional prospect, adviser Selin Aydin makes a two-part pitch. First, she presents returns from her three best-performing accounts, describing them as 'typical results.' Second, she hands the prospect a reference sheet listing five current clients' names, account sizes, and investment strategies, none of whom she asked for permission. The prospect later calls two of the listed clients. Aydin's distribution of the reference sheet most directly implicates which Standard?
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