Ethical and Professional Standards Q43

43Klaus Matthias, CFA, works at Meinhard Capital, an investment and brokerage firm where he supervises a team that develops and markets fixed-income funds to cater to different high net worth clients internationally. Recently, due to the popularity of Islamic products he has asked his team to develop an Islamic Fund to market to his clients in the Middle East. The team includes three individuals who are all candidates in the CFA Program. After some research, they come up with a product that seems marketable to this specific niche. Before the distribution of the fund, Matthias is worried whether the Fund is suitable for all Islamic investors. Matthias should:

Option : B
Explanation : Refer to Standards I(A) Knowledge of the Law and III(C) Suitability. Members and candidates should understand that a single product cannot be suitable for all Islamic investors. The best way to deal with this situation is to clearly define which Islamic laws and regulations are being followed in the creation of the product and the types of investors for whom this fund will be suitable.

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