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 V(A) Diligence and Reasonable Basis practice questions
Standard V(A) Diligence and Reasonable Basis 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 3 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 V(A) Diligence and Reasonable Basis
Before making a recommendation, an analyst must have:
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Standard V(A) Diligence and Reasonable Basis
A wealth adviser recommends a private fund to all clients after reading a consultant's one-page summary and noting that a competing adviser also uses the fund. The adviser does NOT review the fund's strategy, liquidity terms, valuation policy, or manager background. The adviser most likely violates:
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Standard V(A) Diligence and Reasonable Basis
A strategist adopts a vendor macro model that ranks currencies. The vendor will NOT disclose the model's variables, testing period, or sensitivity to interest-rate assumptions. The strategist recommends large currency positions because the vendor has a strong brand. The most accurate conclusion is that the strategist:
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