CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

In terms of CFA Institute's Standards of Professional Conduct when dealing with the purpose and scope of Standard V (A) Diligence and Reasonable Basis, which of the following statements are correct?

I. Members must establish a reasonable basis for all investment recommendations and actions.
II. This standard is meant to address only the member-client relationship.
III. Diligence must be exercised to avoid any material misrepresentation.
IV. Records and documentation must be maintained in order to support investment recommendations and actions.
A. I and II only
B. I and III
C. I, III and IV only
Explanation: This standard is also meant to address the role of the member within the investment decision-making process as well as the support provided by the organization to the investment professional in carrying out his role.

User Contributed Comments 6

User Comment
dimanyc The only thing I found that looks more or less the same is the following statement: "if a member or candidate has reason to suspect that either secondary or third-party research or information comes from a source that lacks a sound basis, the member must refrain from relying on that info".
HenryQ IV is about V(C). V(A) does not say to keep the docs and records...
hnthan I agree with HenryQ - record retention is V(c)
tim2 Do we really need to know which section every regulation comes under?
toxoplasmosis That's right.But,it may not be easy in the exam recollecting every detail.One can still try.
rhardin IV is also suggested under "Communication with Clients and Prospective Clients."
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