CFA Practice Question

There are 291 practice questions for this study session.

CFA Practice Question

Ron Prater and Mike Richards, two analysts who work for different employers, have been invited by a company they are both researching to tour some of their factories across the nation. The company has chartered group flights from site to site and arranged for accommodations with a chain of hotels that are near each site for a total of four nights. Ron Prater takes advantage of this offer, while Mike Richards insists on paying for his airfare and hotel, in-keeping with his own firm's policies. Who is right?

A. Mike is more ethical in this situation, as he is not taking anything that might compromise his independence or objectivity.
B. They are both behaving ethically, as they are following their firm's separate guidelines. As long as they are both careful to remain objective and cautious about the possible perceived compromise of integrity, there is no problem with the actions of either Ron or Mike.
C. Ron is more ethical, as he is not putting his own comfort ahead of the benefit of his firm.
Correct Answer: B

They are both behaving ethically, as they are following their firm's separate guidelines. As long as they are both careful to remain objective and cautious about the possible perceived compromise of integrity, there is no problem with the actions of either Ron or Mike.

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