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(B) Fair Dealing practice questions
Standard III(B) Fair Dealing 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(B) Fair Dealing
A firm changes a recommendation from hold to buy and calls its largest client one hour before releasing the change to other clients. The firm most likely violates:
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Standard III(B) Fair Dealing
A firm upgrades a thinly traded micro-cap from hold to buy. The research head wants to call the ten largest clients first, then email all others one hour later. The most appropriate policy is to:
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Standard III(B) Fair Dealing
A manager receives an oversubscribed IPO allocation suitable for several client portfolios. The compliance policy calls for pro rata allocation among suitable accounts after excluding accounts with investment restrictions. The manager instead gives the full allocation to the largest accounts to reward long relationships. The manager most likely violates Fair Dealing because:
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Standard III(B) Fair Dealing
A firm changes a stock from buy to sell after market close. The analyst plans to call three high-fee clients before issuing the morning research blast to all clients. The most appropriate procedure is to:
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