- CFA Exams
- CFA Exam: Level I 2021
- Study Session 1. Ethical and Professional Standards
- Reading 3. Guidance for Standards I-VII
- Subject 22. Standard VII (B) Reference to CFA Institute, the CFA Designation, and the CFA Program
CFA Practice Question
There are 361 practice questions for this study session.
CFA Practice Question
Ron and Shawn are portfolio managers in a bank trust department. They have just been awarded the right to use the CFA designation. The bank is going to place an advertisement stating these two persons passed all the three CFA exams on their first tries (which is true). Is this ad appropriate?
Correct Answer: No
The proposed advertisement does not represent use of the designation in a dignified and judicious manner, since it implies that those people who pass the exams on the first try will be more successful than those who do not, which is misleading.
User Contributed Comments 13
|seanzhang||Never use the CFA designation in any advertisements.|
|AshVini||no its not that u cant use the CFA designation in any ad. u can use it. but the main point to remember is that do not show ur supiriority that u passed in 1st attempt or got gold medal. this may be misleading that u will perform better than those who scored less than wht u did.
|TheProfet||The Standards state that you can state that a CFA passed all three levels on the first try as a matter of fact; the distinguishing point is that this statement cannot imply that an member can obtain or achieve superior returns or performance over someone who is not a CFA or A CFA that did not pass all three parts on their first try. Stating this in an ad implies so (it is an ad).|
|stevelaz||You can state that you passed all three levels in three years as long as it does not imply that you are better than someone who did not take 3 yrs. It cannot be used to imply a superior performance over and above another CFA charter holder|
|hannovanwyk||Yes, you can state that you passed it in the first attempt, as long as the intent is not to state superiority.
very gray area...
|Shalva||So, as I understand - you can write this in your CV - and it will be a mere statement of fact. But you can't place it on firms advertisement - because it will be misleading for clients and general public. Is that correct?|
|giroth||This has always tripped me up, even if it is an advertisement, "passed on first try" is still a statement of fact, we would have to look at the specific advertising materials to determine whether this "implies superior performance".|
|rocyang||Do I violate the Standards if I state that I passed all 3 levels on first tries with a smirk on my face?
|cslau83||but question doesn't say that the ad imply superior of performance. It just state that they pass on 1st try|
|geofin||This is from the official handbook (p. 181):
"If a candidate passes each level of the exam in consecutive years and wants to state that he or she did so, that is not a violation of Standard VII(B) because it is a statement of fact. If the candidate then goes on to claim or imply superior ability by obtaining the designation in only three years, however, he or she is in violation of Standard VII(B)."
We have to assume A LOT about this ad to choose the right answer :(
|johntan1979||I agree with hannovanwyk. Very gray area. What's wrong with stating the fact? There IS a reason why some people pass all 3 levels at the first tries... They are smarter and better, worked harder than the rest! There is no implication whatsoever that these people will produce better portfolio performance... Why would anyone think that way, especially someone from the public looking at the statement?
Let's look at this from another angle... Wouldn't you be MISLEADING prospective clients by not stating how many times you tried before you passed each level?
Try to be a client and choose between:
Mr A - passed all 3 levels at the first tries
Mr B - retook each level more than once before passing
With more and more CFA charterholders entering the market each year, you simply need to learn how to market yourself. Period.
|johntan1979||But I guess what CFA Institute is trying to teach us here is Mr A's CFA designation = Mr B's CFA designation.
Both EARNED the designation, no matter how they got there. Otherwise, CFA civil war will break out between the elite CFA and commoners ;)
|marianne1||you can state that you passed all of your exam at the first try but using it in an advertisement implicit a superior quality in respectof other candidate|