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(C) Suitability practice questions
Standard III(C) Suitability 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 6 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(C) Suitability
For an advisory client, suitability most directly requires the adviser to consider:
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Standard III(C) Suitability
A client with a conservative IPS asks to buy a highly speculative stock. The adviser believes it is unsuitable but the client insists. The best response is to:
View sampleEthical and Professional Standards
Standard III(C) Suitability
A portfolio manager with discretionary authority learns that a client's liquidity need has changed materially. The manager should most appropriately:
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Standard III(C) Suitability
A retired low-risk client insists in writing on putting 20% of assets into a highly leveraged commodity fund inconsistent with her IPS. The adviser should:
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Standard III(C) Suitability
A retired client with a low risk tolerance asks her adviser to buy a volatile single-country equity ETF with 25% of her portfolio after seeing strong recent performance. The ETF is liquid and has a reasonable expected return. The adviser's most appropriate response is to:
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Standard III(C) Suitability
A nondiscretionary client insists on buying a speculative private placement that the adviser believes is unsuitable. The adviser explains the concerns, the client still directs the trade, and firm policy permits execution of unsolicited trades with documentation. The adviser most appropriately should:
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