CFA Practice Question

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CFA Practice Question

Which of the following are fiduciary duties?

A. prudence, diversification, risk reduction and sound management
B. confidentiality, loyalty, prudence, diversification
C. loyalty, prudence, care
Correct Answer: C

User Contributed Comments 13

User Comment
ameba Why the answer is not B?
Nick179 Yes, why not B?
There is not much diference between B and C, but B looks better.
mike250 Fiduciary duties do not include diversification and confidentiality.
0is4eva Definition of III(A) includes: "M&Cs have a duty of LOYALTY to their clients and must act with reasonalbe CARE and exercise PRUDENT judgement. ... determine applicable FIDUCIARY DUTY ... to whom it is owed"

One must thus know the definitions of each standard "by heart", even though the other key words might be good for a member or candidate to follow, they are not brought up in the context of FIDUCIARY DUTY under standard III(A) and are thus not eligible choices here.
quynhnk79 The key: FIDUCIARY DUTY
TammTamm Hence the title of this standard-loyalty, prudence & care
giroth Diversification may not be a goal of a client, therefore does not belong in definition of fiduciary duty
rsanfo Fiduciary duty applies to a variety of jobs, for example a Lawyer. Therefore, answers A and B are incorrect because diversification is relevant for a Financial Analyst, but not for a Lawyer, for example.
adilizhan Because B does not include care. Reasonable care is a part of fiduciary duty.
Shaan23 Just memorize the definition and do the question. Dont think.
shash0678 Fiduciary duty is a position of trust, and confidentiality is not needed - sounds very awkward, if not completely incorrect.

IMHO, B should be the answer too (though diversification may not be fully correct)
shaiarah By definition. Shaan23 is right - dont overthink it
Rachelle3 fiduciary duty is Fruit or a Food - prudence like a prune
fiduciary duty is what you Feel - care
fiduciary duty is Forever - loyalty
it seem strange but its how I remember it!!!
notice what I did with all those F's? = >
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