- CFA Exams
- CFA Level I Exam
- Topic 10. Ethical and Professional Standards
- Learning Module 3. Guidance for Standards I-VII
- Subject 15. Standard V (A) Diligence and Reasonable Basis
CFA Practice Question
Which of the following is not a specific element relating to standard "diligence and reasonable basis"?
II. maintaining appropriate records
III. avoiding material misrepresentation
IV. diligence and thoroughness in recommendations
I. fiduciary duty
II. maintaining appropriate records
III. avoiding material misrepresentation
IV. diligence and thoroughness in recommendations
Correct Answer: I
User Contributed Comments 7
| User | Comment |
|---|---|
| kalps | Fiduciary duty does not relate to investments - t is more of a duty as a director etc so you have a fiduciary duty to shareholders again this is noot necessarily to maximise profits but to ensure that they are treated equally and fairly |
| danlan2 | In the note, it's saying "diligence must be exercised to avoid any material misrepresentation". |
| krisscfa | 'Fiduciary duty' belongs to Standard III-A(Loyalty,Prudence, and Care) |
| danrow | I think that there is an overlap between this standard and Standard III A. When you are not exercise prudence and care, you do not apply reasonable basis. Someone who cares about his/her and is prudent would base their decisions on strong analysis. |
| wundac | Fiduciary duty is Loyalty and fairness to C and PC |
| justbassbaby | II-maintain appropriate records should be under record retention, not diligence and reasonable basis |
| NikolaZ | Maintaining appropriate records ensures that you are diligent and reasonable in your decision making. Think of appropriate records as supportive evidence to your research that comprises your diligent and reasonable basis and the question should become clear. |