CFA Practice Question

CFA Practice Question

Bright and Barron are portfolio managers in a mutual fund management firm. They were awarded the right to use the CFA designation recently. The firm wishes to place a newspaper advertisement to publicize their accomplishment. In order to comply with Standard VII (B) - Reference to CFA Institute, the CFA Designation, and the CFA Program, the following information could be included in the advertisement:

I. Mention that Bright and Barron were required to pass three exams totaling 18 hours
II. Description of the areas of knowledge tested
III. Mention that Bright and Barron scored exceptionally well on the exams
IV. Indication that Bright and Barron are now better prepared to provide investment advice to clients
A. I and III
B. I, II and IV
C. I and II
Explanation: According to Standard VII (B), an advertisement should be limited to stating facts regarding the designation and/or CFA Institute as the conferring organization. For example, the advertisement could simply say that Bright and Barron were required to take three examinations totaling 18 hours over a minimum of three years. It can also include a brief summary of the various areas of knowledge tested.

User Contributed Comments 11

User Comment
Kuki Why not IV. Being "better prepared to provide investment advice to clients" sounds right to me! Anyone?
carnival Not IV. The CFA designation should not imply any "better" investment performance. Better prepared, although not stated explicitly, implies that.
hannovanwyk Better prepared could mean better prepared with regards before the same person passed CFA. It makes sense that you will be better prepared (not necessarily better than others) otherwise what is the purpose of the designation?
StanleyMo hmm, i think you can say your skill is enchanced, but never relates to your service or performance to customer?
cong I think the rule is to state facts only. Don't use words like better!
Borsh being cfa doesn't necessarily make you better.. you could be so smart that cfa was a waste of time for you.
ninad123 why not 3 if the guys have scored exceptionally well. if it is a fact?
nzdavid ninad123 I believe you don't get told what your mark was when you pass, so you can't say that you "scored exceptionally well". Someone who has passed may like to confirm this.
ninad123 hmm.. good point nzdavid, thanks
tommyguard3 Not III because you do not know your mark so it is not a fact.

Not IV because the CFA Designation means you have successfully completed the course of study, that does not necessarily mean you are better than someone else or even than you were before, it is implied and hopefully you would be better, but there is no quantifiable proof. Basically the CFA Institute doesn't want to be liable if a CFA Charter Member does a bad job so they say that they aren't endorsing anything other than the fact that they passed an exam.
mrpman cong i second that motion! (regarding this specific standard)
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