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CFA: Ethics Exam Questions and Answers 2024( A+ GRADED 100% VERIFIED).
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CFA: Ethics Exam Questions and Answers 2024( A+ GRADED 100% VERIFIED).
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CFA: EthicsWhich of the following statements is most accurate? Ethics can be described as:
A) a commitment to upholding the law.
B) an individual's personal opinion about right and wrong.
C) a set of moral principles that provide guidance for our behavior. - ANS C
Which of the following statements is most accurate? Standards of conduct:
A) are a necessary component of any code of ethics.
B) serve as a general guide regarding proper conduct by members of a group.
C) serve as benchmarks for the minimally acceptable behavior required of members of a group.
- ANS C
Which of the following best outlines the minimally acceptable behaviors expected of a member
belonging to a societal group?
A) Standards of conduct
B) Code of ethics
C) A firm's employee handbook - ANS A
Most societies would least likely consider ethical principles to include:
A) justice.
B) duplicity.
C) diligence. - ANS B (Duplicity = Deception)
Q. Ethical conduct is most likely behavior that:
A) simply considers both the direct benefit and indirect consequences on others.
B) is perceived to be beneficial as per society's ethical expectations.
C) conforms to expectations as laid out by laws and regulations. - ANS B
Which of the following statements is most accurate? Investment professionals have a special
responsibility to act ethically because:
A) the industry is heavily regulated.
B) they are entrusted to protect clients' assets.
,C) the profession requires compliance with its code of ethics. - ANS B
Which of the following statements best completes the following sentence? Professionals use
their specialized knowledge and skills:
A) in service to others.
B) to advance their career.
C) for the exclusive benefit of their employers. - ANS A
Which of the following statements is most accurate? A profession's code of ethics:
A) includes standards of conduct or specific benchmarks for behavior.
B) ensures that all members of a profession will act ethically at all times.
C) publicly communicates the shared principles and expected behaviors of a profession's
members. - ANS C
A profession is most likely described as a group of people that:
A) has a common level of basic knowledge about a particular subject.
B) monitors its members based on an agreed-on code of ethics.
C) puts the interests of its members first. - ANS B
The goals of the CFA Institute Code of Ethics would least likely include:
A) publicly communicating established principles.
B) addressing past ethical failings.
C) fostering public confidence. - ANS B
The CFA Institute Code of Ethics and Standards of Professional Conduct are most likely
designed to foster and reinforce a culture of:
A) responsibility and professionalism.
B) regulatory compliance.
C) service to the firm. - ANS A
An investment fund manager has a finance degree and over 20 years of experience working for
a top-ranking asset management firm. Based only on this information, could the investment fund
manager most likely claim to be part of a profession?
A) Yes, a person working in this industry requires specialized knowledge and skills.
B) No.
C) Yes, as part of the industry, he is providing a service to others. - ANS B
Which of the following will most likely determine whether an individual will behave unethically?
,A) The person's character
B) The person's internal traits and intrinsic motivation
C) External factors, such as environmental or cultural elements - ANS C
Which of the following statements is most accurate?
A)Large financial rewards, such as bonuses, are the most powerful situational influences.
B)When decision making focuses on short-term factors, the likelihood of ethical conduct
increases.
C)Situational influences can motivate individuals to act in their short-term self-interests without
recognizing the long-term risks or consequences for themselves and others. - ANS C
The belief that one's ethical standards are above average is most likely a reflection of which of
the following behavioral biases?
A) Overconfidence
B) Short-term focus
C) Situational influence - ANS A
When an otherwise honest person allows the promise of a bonus to negatively influence her
behavior, it is most likely an example of what type of ethical challenge?
A) Overconfidence bias
B) Situational influence
C) Compliance oversimplification - ANS B
Which of the following statements is most accurate?
A) All legal behavior is ethical behavior.
B) Some ethical behavior may be illegal.
C) Legal standards represent the highest standard. - ANS B
Which of the following statements is most accurate?
A) Increased regulations are the most useful means to reduce unethical behavior by market
participants.
B) Regulators quickly design and implement laws and regulations to address practices that
adversely affect the fairness and efficiency of markets.
C) New laws designed to reduce or eliminate conduct that adversely affects the markets can
create opportunities for different, but similarly problematic, conduct. - ANS C
Which of the following situational influences is likely to have the most effect on the financial
adviser's efforts to get new clients to invest in the funds? His relationship with his:
, A) client.
B) employer.
C) teammates. - ANS C
Which of the following statements is most accurate? An ethical decision-making framework:
A) is only beneficial when a firm lacks a code of ethics.
B) is used to improve compliance with laws and regulations.
C) is a tool for analyzing the potential alternative actions and consequences of a decision. -
ANS C
Which of the following is most accurate? Ethical decision-making frameworks:
A) raise awareness of different perspectives.
B) focus attention on short-term consequences.
C) allocate more weight to those who will directly benefit from the decision. - ANS A
Which of the following is most accurate? Ethical decision-making frameworks:
A) are not needed if behavior is legal.
B) identify who gains the most from a decision.
C) can help reduce unanticipated ethical lapses and unexpected consequences. - ANS C
Using an ethical decision-making framework, which of the following duties would most likely take
precedence in the scenario described? The financial adviser's duty to his:
A) client.
B) employer.
C) colleagues. - ANS A
Using an ethical decision-making framework, the financial adviser would most likely:
A) recommend that the elderly client invest at least some of his assets in the highly rated fund.
B) research other investments that can provide steady income before making a
recommendation to his elderly client.
C) disclose the commission he would earn before recommending that the elderly client invest at
least some of his assets in the highly rated fund. - ANS B
Sue Kim, CFA, a US citizen, works as an analyst for a subsidiary of a US investment firm on a
small island that attracts offshore investment accounts. Local securities laws allow insider
trading. While having dinner with the CEO of a local company, Kim learns that the firm is in
negotiations to be acquired for a significant premium. Would Kim most likely comply with the
CFA Institute Standards if she purchased the company's shares for her client accounts?
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