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
Standard III(A) Loyalty Prudence and Care practice questions
Standard III(A) Loyalty Prudence and Care 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 4 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
Standard III(A) Loyalty Prudence and Care
Under Duties to Clients, client interests should generally be placed:
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Standard III(A) Loyalty Prudence and Care
A pension sponsor asks the manager to buy bonds that violate the plan's IPS to raise reported yield before a debt issuance. The manager's most appropriate response is to:
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Standard III(A) Loyalty Prudence and Care
A pension plan sponsor hires an adviser to manage plan assets and asks the adviser to overweight the sponsor's publicly traded shares to support the sponsor's share price. The plan documents require prudent diversification for participants. The adviser should most appropriately treat the client as:
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Standard III(A) Loyalty Prudence and Care
A manager directs client brokerage to a broker that provides luxury office furniture to the manager's firm. The broker's execution quality is average and the furniture does NOT support investment decision making for the client accounts. The manager's conduct most likely violates:
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