ditchdigger2CFA
New member
- Jun 18, 2026
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Question 1 - 94374
Janine Walker is an individual investment advisor with 200 individual clients. When she first obtains a client, Walker solicits personal data that helps her formulate an investment recommendation, including tax status, income, expenditure needs, and risk tolerance. The Standards:
A) require Walker to update the data regularly.
B) require updating a client’s data only when a material change occurs to the personal data.
C) only require to update a client’s data when a material change is being made to the clients’ portfolio.
——————————————————————————–
Question 2 - 86794
While servicing his clients’ accounts, an analyst who is a CFA charterholder, determines that one client is probably involved in illegal activities. According to Standard III(E), Preservation of Confidentiality, the analyst may NOT do which of the following?
A) There are no exceptions in this list.
B) Contact the appropriate governmental authorities about the determination.
C) Contact CFA Institute about the determination.
——————————————————————————–
Question 3 - 94931
Julie Stades retired several years ago and relinquished her membership in CFA Institute. She had the CFA designation up until then. She has decided to go back to work and puts the following statement on her resume: “I earned the CFA designation 10 years ago.” Is this a violation of Standard VII(B)?
A) No, as long as she does not indicate she currently has the designation.
B) Yes, she has used the letters “CFA” in an undignified manner.
C) Yes, because she uses “CFA” as a noun.
——————————————————————————–
Question 4 - 94673
Which of the following statements about the responsibilities of CFA charterholders is TRUE? CFA charterholders:
A) are only obligated to comply with securities laws in the U.S.
B) must comply with the laws and rules governing their profession or must not engage in any individual behavior that reflects adversely on the entire profession.
C) must comply with the laws and rules governing their profession and must not engage in any individual behavior that reflects adversely on the entire profession.
——————————————————————————–
Question 5 - 94698
Timothy Hooper, CFA, is a security analyst at an investment firm. In his spare time, Hooper serves as a volunteer for City Pride, which collects clothes for the homeless. Hooper has occasionally given some of the clothes to his friends or sold the clothes instead of returning all of the clothing to City Pride. City Pride discovers what he has been doing and dismisses him. Later, City Pride learns that other volunteer organizations have dismissed Hooper for similar actions. Has Hooper violated Standard I(D) on professional misconduct in the CFA Institute Standards of Professional Conduct?
A) No, because Hooper’s conduct is unrelated to his professional activities as a security analyst.
B) No, because Hooper volunteers his services to City Pride.
C) Yes.
——————————————————————————–
Question 6 - 94834
John Hill, CFA, has been working for Advisors, Inc., for eight years. Hill is about to start his own money management business and has given his two-week notice of his resignation from Advisors. A few days before his resignation takes effect, on his lunch hour, he takes out a loan from a bank on behalf of his new business and uses the money to buy some office equipment for his new business. Since he engaged in these transactions while still an employee of Advisors, Hill violated Standard IV(A), Loyalty to Employer, by:
A) engaging in a financial transaction, like taking out a loan, only.
B) neither of these actions.
C) both taking out the loan and purchasing the office equipment.
——————————————————————————–
Question 7 - 93526
Robert Hamilton, a CFA candidate, is preparing a research report on Pets-R-Us for public distribution. Hamilton’s preliminary report contains unfavorable earnings forecasts for the next four quarters. As part of his analysis, Hamilton met with Linda Brisson, the president of Pets-R-Us, and asked her to review the preliminary report for factual inaccuracies. Brisson revised Hamilton’s earnings forecasts so that the quarterly earnings showed an upward trend and resulted in positive earnings by the fourth quarter. Hamilton included the revised earnings figures in his report without further review. Although the final report included the basic characteristics of Pets-R-Us, it emphasized certain areas such as projected quarterly earnings but only briefly touched on others. According to CFA Institute Standards of Professional Conduct on research reports, Hamilton:
A) violated the Standard because the report did not give similar attention to all areas but instead emphasized quarterly earnings at the expense of other areas.
B) did not violate the Standard.
C) violated the Standard because he did not thoroughly review and analyze any information provided by Brisson.
——————————————————————————–
Question 8 - 94754
In securing the shares for all accounts under her management, Linda Kammel of Northwest Futures purchased three blocks of shares at three different prices. She then allocated these shares by placing shares from the first block in accounts with surnames beginning with A-G. The second was allocated over accounts H-P, and the third over Q-Z. This action is:
A) not permissible under the Code and Standards.
B) consistent with her responsibilities under the Code and Standards.
C) permissible only if the clients are informed of the allocation procedure.
——————————————————————————–
Question 9 - 86914
Liz Davis is a portfolio manager for a firm that claims it is in compliance with CFA Institute Soft Dollar Standards. In purchasing bonds for the account of the pension fund of Richards Company, no commissions were paid but there was a spread charged by the broker between the purchase and sale price of the bonds. The brokerage on the trade is not governed by any securities regulation. The specific brokerage from the trade:
A) can be used to benefit another client as long as Davis receives prior consent from Richards.
B) cannot be used to benefit any other client.
C) can be used to benefit another client as long as Richards benefits from other the client’s brokerage in the future.
——————————————————————————–
Question 10 - 86983
Greg Hibbert, CFA, is working with his firm’s compliance department to implement policies and procedures that comply with the requirements of the CFA Institute Research Objectivity Standards (ROS). Hibbert has informed the compliance officer that in order to meet the ROS requirements, the firm must require a written annual update of personal investments held by covered investment personnel or their families, and must provide a list of activities that violate the firm’s policies and the accompanying disciplinary actions to all of the firm’s clients and prospects. Are Hibbert’s statements regarding personal investments and the disclosure of violating activities CORRECT?
Personal Investments Violating Activities
A) No No
B) Yes No
C) Yes Yes
——————————————————————————–
Question 11 - 94916
Which of the following is a component of the Code of Ethics? CFA Institute members shall:
A) strive to maintain and improve their competence and the competence of others in the profession.
B) act for the benefit of their clients and place their clients’ interests before their own.
C) disclose to their employer all matters that reasonably could be expected to interfere with their duty to their employer or ability to make unbiased and objective recommendations.
——————————————————————————–
Question 12 - 94946
Several years ago, Hilton and Ross, a full service investment firm, managed the initial public offering of eCom, Inc. Now, eCom wants Hilton and Ross to underwrite its secondary public offering. A senior manager at Hilton and Ross asked Brent Whitman, CFA, one of its equity analysts, to write a favorable research report on eCom to help make the underwriting a success. Whitman conducted a thorough analysis of eCom and concluded that the company has serious problems, which did not suggest a favorable financial outlook. Nevertheless, Whitman wrote a favorable report, because he was fearful of losing his job. Hilton and Ross publicly distributed the report that only contained:
A brief description of the basic characteristics of eCom.
A statement that “the stock price will double within six months.”
A buy recommendation.
Which of the following statements about Whitman’s violation of CFA Institute Standards of Professional Conduct is most correct? Whitman violated:
A) Standard V(A), V(B), and I(B).
B) Standard V(A), Diligence and Reasonable Basis only.
C) Standard I(B), Independence and Objectivity, only.
——————————————————————————–
Question 13 - 94531
An analyst provides services for a charitable organization and in return gets free membership in the organization. Part of her job is to manage the liquid assets of the organization, and those assets include stocks. Her supervisor in the organization calls her and tells her to buy a certain stock for the portfolio based upon insider information from a board member in the organization. The analyst objects, but the supervisor says this is what they have always done and sees no reason for changing now. The analyst complies with the request. With respect to Standards IV(A), Loyalty to Employer, and II(A), Material Nonpublic Information, the analyst violated:
A) both Standards IV(A) and II(A).
B) only Standard II(A) that prohibits insider trading.
C) only Standard IV(A) requiring duty of loyalty.
——————————————————————————–
Question 14 - 86972
June Bird is a pension consultant asked to advise on the Backwater County Pension Plan. Bird notices that 20 percent of the plan’s assets are invested in privately held local businesses. Bird is concerned about the lack of liquidity and diversification caused by such an investment. She learns that state law allows investing in local businesses and county law requires at least one-fifth of the plan’s assets to be dedicated to investing in local businesses. Bird:
A) can continue to advise the pension plan as best she can with the restrictions.
B) should file a written complaint to the Department of Labor pointing out that the law is in conflict with the Employee Retirement Income Security Act (ERISA).
C) should recommend that the trustees resign or risk being sued for violating the Prudent Expert Rule.
——————————————————————————–
Question 15 - 94660
David Saul, CFA, heads the trust department at Savage National Bank. Fairway Enterprises invites Saul to sit on its Board of Directors. In return for his services on the Board, Fairway offers to provide Saul and his family with access to the facilities at Wilmont Country Club at no cost. Saul will not receive any monetary compensation for his services on the Board. According to CFA Institute Standards of Professional Conduct, which of the following actions must Saul take?
A) Saul must obtain written consent from all parties to only if he decides to accept the offer to serve on the Board of Directors.
B) Saul must disclose in writing to Savage Bank the terms of the offer whether or not he accepts the offer to serve on the Board of Directors.
C) Saul must reject the offer to serve on the Board of Directors.
——————————————————————————–
Question 16 - 94641
Greg Stiles, CFA, keeps a list of his clients’ birthdays and has personally sent them a birthday card each year at the appropriate time. With respect to this action, which of the following may be a violation of Standard III(E), Preservation of Confidentiality?
A) Sending a gift along with the card.
B) Hiring a company outside the firm to perform the task.
C) The mere act of sending a birthday card each year.
——————————————————————————–
Question 17 - 94389
Randal Brooks is the chief economist for a large brokerage firm. In the aftermath of a national tragedy, Brooks feels that it is very possible that the stock market will drop significantly and not recover for several years. However, he does not believe that this is the most likely scenario but merely that the risk of investing in equities has increased. He decides to write a market commentary to the brokerage clients that discusses the reasons why the market will remain stable and talks about why he, as a private citizen, feels patriotic. He does not mention the increase risk in equities. Brooks has:
A) violated the Standards by not including all of the relevant factors in the research report, but not by making patriotic statements.
B) violated the Standards by not including all of the relevant factors in the research report and making patriotic statements.
C) not violated the Standards.
——————————————————————————–
Question 18 - 93361
The CFA Institute Standards of Practice Handbook requires CFA Institute members to do all the following EXCEPT:
A) receive written permission from both their employer and outside clients to engage in investment consulting outside the firm.
B) to disclose in writing to the proper regulatory authority all observed violations of the securities laws and regulations.
C) to inform employer, clients, and potential clients of benefits received for recommending products or services.
——————————————————————————–
Question 19 - 94922
For an employee with the CFA designation who works for a firm, which of the following is NOT necessary to meet the requirements of the Code and Standards?
A) It is recommended that their employer is aware of the Code and Standards.
B) Deliver a copy of the Code and Standards to their employer.
C) Recommend notifying their employer of their responsibility to follow the Code and Standards.
——————————————————————————–
Question 20 - 94371
Standard VI(B), Priority of Transactions, applies to transactions an analyst takes on behalf of:
A) his clients.
B) both of these.
C) his employer.
Janine Walker is an individual investment advisor with 200 individual clients. When she first obtains a client, Walker solicits personal data that helps her formulate an investment recommendation, including tax status, income, expenditure needs, and risk tolerance. The Standards:
A) require Walker to update the data regularly.
B) require updating a client’s data only when a material change occurs to the personal data.
C) only require to update a client’s data when a material change is being made to the clients’ portfolio.
——————————————————————————–
Question 2 - 86794
While servicing his clients’ accounts, an analyst who is a CFA charterholder, determines that one client is probably involved in illegal activities. According to Standard III(E), Preservation of Confidentiality, the analyst may NOT do which of the following?
A) There are no exceptions in this list.
B) Contact the appropriate governmental authorities about the determination.
C) Contact CFA Institute about the determination.
——————————————————————————–
Question 3 - 94931
Julie Stades retired several years ago and relinquished her membership in CFA Institute. She had the CFA designation up until then. She has decided to go back to work and puts the following statement on her resume: “I earned the CFA designation 10 years ago.” Is this a violation of Standard VII(B)?
A) No, as long as she does not indicate she currently has the designation.
B) Yes, she has used the letters “CFA” in an undignified manner.
C) Yes, because she uses “CFA” as a noun.
——————————————————————————–
Question 4 - 94673
Which of the following statements about the responsibilities of CFA charterholders is TRUE? CFA charterholders:
A) are only obligated to comply with securities laws in the U.S.
B) must comply with the laws and rules governing their profession or must not engage in any individual behavior that reflects adversely on the entire profession.
C) must comply with the laws and rules governing their profession and must not engage in any individual behavior that reflects adversely on the entire profession.
——————————————————————————–
Question 5 - 94698
Timothy Hooper, CFA, is a security analyst at an investment firm. In his spare time, Hooper serves as a volunteer for City Pride, which collects clothes for the homeless. Hooper has occasionally given some of the clothes to his friends or sold the clothes instead of returning all of the clothing to City Pride. City Pride discovers what he has been doing and dismisses him. Later, City Pride learns that other volunteer organizations have dismissed Hooper for similar actions. Has Hooper violated Standard I(D) on professional misconduct in the CFA Institute Standards of Professional Conduct?
A) No, because Hooper’s conduct is unrelated to his professional activities as a security analyst.
B) No, because Hooper volunteers his services to City Pride.
C) Yes.
——————————————————————————–
Question 6 - 94834
John Hill, CFA, has been working for Advisors, Inc., for eight years. Hill is about to start his own money management business and has given his two-week notice of his resignation from Advisors. A few days before his resignation takes effect, on his lunch hour, he takes out a loan from a bank on behalf of his new business and uses the money to buy some office equipment for his new business. Since he engaged in these transactions while still an employee of Advisors, Hill violated Standard IV(A), Loyalty to Employer, by:
A) engaging in a financial transaction, like taking out a loan, only.
B) neither of these actions.
C) both taking out the loan and purchasing the office equipment.
——————————————————————————–
Question 7 - 93526
Robert Hamilton, a CFA candidate, is preparing a research report on Pets-R-Us for public distribution. Hamilton’s preliminary report contains unfavorable earnings forecasts for the next four quarters. As part of his analysis, Hamilton met with Linda Brisson, the president of Pets-R-Us, and asked her to review the preliminary report for factual inaccuracies. Brisson revised Hamilton’s earnings forecasts so that the quarterly earnings showed an upward trend and resulted in positive earnings by the fourth quarter. Hamilton included the revised earnings figures in his report without further review. Although the final report included the basic characteristics of Pets-R-Us, it emphasized certain areas such as projected quarterly earnings but only briefly touched on others. According to CFA Institute Standards of Professional Conduct on research reports, Hamilton:
A) violated the Standard because the report did not give similar attention to all areas but instead emphasized quarterly earnings at the expense of other areas.
B) did not violate the Standard.
C) violated the Standard because he did not thoroughly review and analyze any information provided by Brisson.
——————————————————————————–
Question 8 - 94754
In securing the shares for all accounts under her management, Linda Kammel of Northwest Futures purchased three blocks of shares at three different prices. She then allocated these shares by placing shares from the first block in accounts with surnames beginning with A-G. The second was allocated over accounts H-P, and the third over Q-Z. This action is:
A) not permissible under the Code and Standards.
B) consistent with her responsibilities under the Code and Standards.
C) permissible only if the clients are informed of the allocation procedure.
——————————————————————————–
Question 9 - 86914
Liz Davis is a portfolio manager for a firm that claims it is in compliance with CFA Institute Soft Dollar Standards. In purchasing bonds for the account of the pension fund of Richards Company, no commissions were paid but there was a spread charged by the broker between the purchase and sale price of the bonds. The brokerage on the trade is not governed by any securities regulation. The specific brokerage from the trade:
A) can be used to benefit another client as long as Davis receives prior consent from Richards.
B) cannot be used to benefit any other client.
C) can be used to benefit another client as long as Richards benefits from other the client’s brokerage in the future.
——————————————————————————–
Question 10 - 86983
Greg Hibbert, CFA, is working with his firm’s compliance department to implement policies and procedures that comply with the requirements of the CFA Institute Research Objectivity Standards (ROS). Hibbert has informed the compliance officer that in order to meet the ROS requirements, the firm must require a written annual update of personal investments held by covered investment personnel or their families, and must provide a list of activities that violate the firm’s policies and the accompanying disciplinary actions to all of the firm’s clients and prospects. Are Hibbert’s statements regarding personal investments and the disclosure of violating activities CORRECT?
Personal Investments Violating Activities
A) No No
B) Yes No
C) Yes Yes
——————————————————————————–
Question 11 - 94916
Which of the following is a component of the Code of Ethics? CFA Institute members shall:
A) strive to maintain and improve their competence and the competence of others in the profession.
B) act for the benefit of their clients and place their clients’ interests before their own.
C) disclose to their employer all matters that reasonably could be expected to interfere with their duty to their employer or ability to make unbiased and objective recommendations.
——————————————————————————–
Question 12 - 94946
Several years ago, Hilton and Ross, a full service investment firm, managed the initial public offering of eCom, Inc. Now, eCom wants Hilton and Ross to underwrite its secondary public offering. A senior manager at Hilton and Ross asked Brent Whitman, CFA, one of its equity analysts, to write a favorable research report on eCom to help make the underwriting a success. Whitman conducted a thorough analysis of eCom and concluded that the company has serious problems, which did not suggest a favorable financial outlook. Nevertheless, Whitman wrote a favorable report, because he was fearful of losing his job. Hilton and Ross publicly distributed the report that only contained:
A brief description of the basic characteristics of eCom.
A statement that “the stock price will double within six months.”
A buy recommendation.
Which of the following statements about Whitman’s violation of CFA Institute Standards of Professional Conduct is most correct? Whitman violated:
A) Standard V(A), V(B), and I(B).
B) Standard V(A), Diligence and Reasonable Basis only.
C) Standard I(B), Independence and Objectivity, only.
——————————————————————————–
Question 13 - 94531
An analyst provides services for a charitable organization and in return gets free membership in the organization. Part of her job is to manage the liquid assets of the organization, and those assets include stocks. Her supervisor in the organization calls her and tells her to buy a certain stock for the portfolio based upon insider information from a board member in the organization. The analyst objects, but the supervisor says this is what they have always done and sees no reason for changing now. The analyst complies with the request. With respect to Standards IV(A), Loyalty to Employer, and II(A), Material Nonpublic Information, the analyst violated:
A) both Standards IV(A) and II(A).
B) only Standard II(A) that prohibits insider trading.
C) only Standard IV(A) requiring duty of loyalty.
——————————————————————————–
Question 14 - 86972
June Bird is a pension consultant asked to advise on the Backwater County Pension Plan. Bird notices that 20 percent of the plan’s assets are invested in privately held local businesses. Bird is concerned about the lack of liquidity and diversification caused by such an investment. She learns that state law allows investing in local businesses and county law requires at least one-fifth of the plan’s assets to be dedicated to investing in local businesses. Bird:
A) can continue to advise the pension plan as best she can with the restrictions.
B) should file a written complaint to the Department of Labor pointing out that the law is in conflict with the Employee Retirement Income Security Act (ERISA).
C) should recommend that the trustees resign or risk being sued for violating the Prudent Expert Rule.
——————————————————————————–
Question 15 - 94660
David Saul, CFA, heads the trust department at Savage National Bank. Fairway Enterprises invites Saul to sit on its Board of Directors. In return for his services on the Board, Fairway offers to provide Saul and his family with access to the facilities at Wilmont Country Club at no cost. Saul will not receive any monetary compensation for his services on the Board. According to CFA Institute Standards of Professional Conduct, which of the following actions must Saul take?
A) Saul must obtain written consent from all parties to only if he decides to accept the offer to serve on the Board of Directors.
B) Saul must disclose in writing to Savage Bank the terms of the offer whether or not he accepts the offer to serve on the Board of Directors.
C) Saul must reject the offer to serve on the Board of Directors.
——————————————————————————–
Question 16 - 94641
Greg Stiles, CFA, keeps a list of his clients’ birthdays and has personally sent them a birthday card each year at the appropriate time. With respect to this action, which of the following may be a violation of Standard III(E), Preservation of Confidentiality?
A) Sending a gift along with the card.
B) Hiring a company outside the firm to perform the task.
C) The mere act of sending a birthday card each year.
——————————————————————————–
Question 17 - 94389
Randal Brooks is the chief economist for a large brokerage firm. In the aftermath of a national tragedy, Brooks feels that it is very possible that the stock market will drop significantly and not recover for several years. However, he does not believe that this is the most likely scenario but merely that the risk of investing in equities has increased. He decides to write a market commentary to the brokerage clients that discusses the reasons why the market will remain stable and talks about why he, as a private citizen, feels patriotic. He does not mention the increase risk in equities. Brooks has:
A) violated the Standards by not including all of the relevant factors in the research report, but not by making patriotic statements.
B) violated the Standards by not including all of the relevant factors in the research report and making patriotic statements.
C) not violated the Standards.
——————————————————————————–
Question 18 - 93361
The CFA Institute Standards of Practice Handbook requires CFA Institute members to do all the following EXCEPT:
A) receive written permission from both their employer and outside clients to engage in investment consulting outside the firm.
B) to disclose in writing to the proper regulatory authority all observed violations of the securities laws and regulations.
C) to inform employer, clients, and potential clients of benefits received for recommending products or services.
——————————————————————————–
Question 19 - 94922
For an employee with the CFA designation who works for a firm, which of the following is NOT necessary to meet the requirements of the Code and Standards?
A) It is recommended that their employer is aware of the Code and Standards.
B) Deliver a copy of the Code and Standards to their employer.
C) Recommend notifying their employer of their responsibility to follow the Code and Standards.
——————————————————————————–
Question 20 - 94371
Standard VI(B), Priority of Transactions, applies to transactions an analyst takes on behalf of:
A) his clients.
B) both of these.
C) his employer.