Chartered Financial Analyst CFA 1 Questions with 100% Correct Answers

In situations where the laws of a member or candidate's country of residence, the local laws of regions where the member or candidate does business, and the Code and Standards specify different requirements, the member or candidate must abide by: A. local law or the Code and Standards, whichever is stricter. B. the Code and Standards or his country's laws, whichever are stricter. C. the strictest of local law, his country's laws, or the Code and Standards Correct Answer C To comply with Standard I(A) Knowledge of the Law, a member must always abide by the strictest applicable law, regulation, or standard. According to the Standard on independence and objectivity, members and candidates: A. may accept gifts or bonuses from clients. B. may not accept compensation from an issuer of securities in return for producing research on those securities. C. should consider credit ratings issued by recognized agencies to be objective measures of credit quality. Correct Answer A Gifts from clients are acceptable under Standard I(B) Independence and Objectivity, but the Standard requires members and candidates to disclose such gifts to their employers. Standard I(B) allows issuerpaid research as long as the analysis is thorough, independent, unbiased, and has a reasonable and adequate basis for its conclwions, and the compensation from the issuer is disclosed. Members and candidates should consider the potential for conflicts of interest inherent in credit ratings and may need to do independent research to evaluate the soundness of these ratings. Bill Cooper finds a table of historical bond yields on the website of the U.S. Treasury that supports the work he has done in his analysis and includes the table as part of his report without citing the source. Has Cooper violated the Code and Standards? A. Yes, because he did not cite the source of the table. B. Yes, because he did not verify the accuracy of the information. C. No, because the table is from a recognized source of financial or statistical data. Correct Answer C According to Standard I(C) Misrepresentation, members and candidates must cite the sources of the information they we in their analysis, unless the information is factual data (as opposed to analysis or opinion) from a recognized financial or statistical