1. In situations where the laws of a member or candidate’s country of residence, the local laws of
regions where the member or candidate does business, and the Code and Standards specify
different requirements, the member or candidate must abide by:
A. local law or the Code and Standards, whichever is stricter.
B. the Code and Standards or his country’s laws, whichever are stricter.
C. the strictest of local law, his country’s laws, or the Code and Standards.
2. According to the Standard on independence and objectivity, members and candidates:
A. may accept gifts or bonuses from clients.
B. may not accept compensation from an issuer of securities in return for producing research on
C. should consider credit ratings issued by recognized agencies to be objective measures of credit
3. Bill Cooper finds a table of historical bond yields on the website of the U.S. Treasury that
supports the work he has done in his analysis and includes the table as part of his report without
citing the source. Has Cooper violated the Code and Standards?
A. Yes, because he did not cite the source of the table.
B. Yes, because he did not verify the accuracy of the information.
C. No, because the table is from a recognized source of financial or statistical data.
4. Which of the following statements about the Standard on misconduct is most accurate?
A. Misconduct applies only to a member or candidate’s professional activities.
B. Neglecting to perform due diligence when required is an example of misconduct.
C. A member or candidate commits misconduct by engaging in any illegal activity.
5. Ed Ingus, CFA, visits the headquarters and main plant of Bullitt Company and observes that
inventories of unsold goods appear unusually large. From the CFO, he learns that a recent
increase in returned items may result in earnings for the current quarter that are below analysts’
estimates. Based on his visit, Ingus changes his recommendation on Bullitt to “Sell.” Has Ingus
violated the Standard concerning material nonpublic information?
B. No, because the information he used is not material.
C. No, because his actions are consistent with the mosaic theory.