CFA Level 1 Practice Questions — All Questions

Under the CFA Institute Code and Standards, when interests conflict, a member should place first the interests of:

• a.Their employer
• b.The client✓
• c.Regulators
• d.Themselves

Client interests come before the employer's and the member's own.

A member who receives material nonpublic information should:

• a.Trade quickly before others learn it
• b.Share it only with best clients
• c.Use it to benefit the firm
• d.Not act or cause others to act on it✓

The Standards prohibit acting or causing others to act on material nonpublic information.

Disclosing conflicts of interest to clients is required because it:

• a.Lets clients judge the objectivity of recommendations✓
• b.Is optional best practice
• c.Eliminates the conflict entirely
• d.Increases fees

Full disclosure lets clients assess potential biases in advice.

Performance presentations to clients must be:

• a.Based only on winning accounts
• b.As optimistic as possible
• c.Fair, accurate, and complete✓
• d.Shown gross of all fees only

Members must present performance information fairly, accurately, and completely.