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Basic Question 1 of 5

One of your clients asks you to purchase securities that you do not believe are legal for this investor to hold. You consult with a legal advisor who is knowledgeable in this area and she says that there is no problem.

A. You have satisfied the Standards and should purchase the securities for your client.
B. You should seek an opinion from an investment manager in an independent firm.
C. You should tell your client that the Standards prohibit you from purchasing the securities.

User Contributed Comments 7

User Comment
zuke As long as you sought legal advice and the individual is independant and compentant you have satisied your requirements.
HenryQ But is the legal advisor is independent here though?!
ZERGEN I think 1 should mention written confirmation citing applicable lwas, rules and regulations instead
dblueroom good call HenryQ, but A looks better compared to other choices.
yesandy11 The key for me is that the legal advisor is knowledgeable in this area. They are competent = buy the securities.
ibrahim18 What does the question mean that "do not believe are legal for the investor to hold". This mean engaging in illegal activities.
shalie Key- you do not believe
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Learning Outcome Statements

demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity

recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct

identify conduct that conforms to the Code and Standards and conduct that violates the Code and Standards

CFA® 2024 Level I Curriculum, Volume 6, Module 3.