- CFA Exams
- CFA Level I Exam
- Topic 10. Ethical and Professional Standards
- Learning Module 3. Guidance for Standards I-VII
- Subject 7. Standard III (A) Loyalty, Prudence, and Care
CFA Practice Question
Which of the following is an element of fiduciary duty?
II. Clients' interests come before your own.
III. You must use discretion when a client reveals sensitive information regarding their financial situation.
I. You should attempt to seek the best price and execution for all clients.
II. Clients' interests come before your own.
III. You must use discretion when a client reveals sensitive information regarding their financial situation.
Correct Answer: I, II and III
User Contributed Comments 13
| User | Comment |
|---|---|
| isida | wouldnt III be more of a condidentiality issue?? |
| foolchi123 | Could any one tell me why III being the element of fiduciary duty? |
| katybo | loyalty? |
| cbb1 | The four basic fiduciary duties based on earlier question are 1. loyalty 2. prudence 3. diversification 4. effectuation Confidentiality is NOT one of them. While are three (I, II, III) are good things, only I and II are specifically covered in the basic fiduciary duties. |
| soham | prudence. it's just about being nice to a guy thats laying it out in the open for you. just be nice. |
| Yooo | "Prudent Man Rule". If you had sensitive information regarding your own financial situation, would you be indiscreet with it? As a fiduciary, you are bound by the same prudent action. |
| masumyee | Material issued by CFA Institute, P.47, talking about the Recommended Procedures for Compliance on Standard III (A) "Maintain confidentiality. Member and candidates must preserve the confidentiality of client information" |
| quynhnk79 | Is it true with cbb1's definition of fiduciary duties? Just in the beginning questions of this part, the answer end up with: diversification is not a fiduciary duty! Why? Pls help! |
| wundac | Fiduciary duties are: Loyalty, prudence and care. I do not believe that diversification and effectuation are valid |
| jpducros | what is the meaning of effectuation ? if relevant... |
| sultana | III is an element of fidicuary duty, because u as CFA charterholder are more qualified and knowledgable to use that piece of information for the overall benefit of the client. The client may be ignorant about the impact of that information. |
| nabilhjeily | where did u got effectuation i didnt see it |
| raffrobb | Confidentiality is prudent. |