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Ethical And Professional Standards MCQ - Ethical And Professional Standards Section 1

1 Which of the following statements is most likely correct?

A
Ethics can be described as a set of moral principles that provide guidance for our behaviour
B
Ethical conduct is behavior that balances one’s own interest with only the direct consequences of the behavior on others
C
Professional associations adopt a code of ethics to protect their own professional community

Statement B is incorrect because ethical conduct is behavior that balances
one’s own interest with the direct and indirect consequences of the
behavior on others. Statement C is incorrect

2 A profession can be best described as:

A profession is a type of job that
1)requires specialized training and skills,
2) is based on service to others, and
3) is practiced by members who share and adhere to a common code of ethics.

3 Which one of the following is the least likely reason for a profession to establish a code of ethics?

The code of ethics cannot ensure that members of the profession will follow the law. Statements A and B are true.

4 Which one of the following statements most likely differentiates clients from customers?

Clients differ from customers. A customer is one who engages in a single or a series of transactions to buy a good or service. The relationship is transactional in nature. A client, on the other hand, uses the services of a professional for his knowledge and skills on the subject on an ongoing basis, for a fee.

5 Standards of conduct can be least likely described as:

a set of principles that define the legal boundaries of a community

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Question:

Which of the following statements is most accurate according to the Standards of Practice Handbook? Members and Candidates:

A. who possess nonmaterial nonpublic information that could affect the value of an investment must not act or cause others to act on the information.
B. who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.
C. who possess nonmaterial public information that could affect the value of an investment must not act or cause others to act on the information.

Correct answer: B

Explanation:

Refer to Standard II(A) Material Nonpublic Information.

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CFA Level 1 Ethical and Professional Standards Practice Questions

Prepare for the CFA Level 1 Ethical and Professional Standards exam with targeted MCQs, answers, and detailed explanations. These CFA Level 1 Ethical and Professional Standards practice questions help candidates understand the CFA Institute Code of Ethics, Standards of Professional Conduct, duties to clients and employers, market integrity, conflicts of interest, professional responsibilities, and ethical decision-making.

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Topics Covered in Ethical and Professional Standards

The CFA Ethical and Professional Standards section covers important areas such as the CFA Institute Code of Ethics, Standards of Professional Conduct, professional responsibilities, duties to clients, duties to employers, conflicts of interest, market integrity, suitability, confidentiality, fair dealing, and ethical decision-making.

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