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Test Prep CFA-Level-I Exam Questions
CFA® Level I Chartered Financial Analyst (Page 29 )

Updated On: 28-Feb-2026
Page 29 of 793
PDF with 3963 Questions

A critical part of Standard IV (A.2) is to distinguish between:

  1. buy side and sell side.
  2. industry and company analysis.
  3. insider trading and appropriate trading.
  4. research reports and investment memoranda.
  5. employees and independent contractors.
  6. CFA charterholders and non-CFA charterholders.
  7. none of these answers.

Answer(s): G

Explanation:

Standard IV (A.2) - Research Reports states the responsibility of AIMR members, CFA charterholders and candidates to include in each research report those key facts that are instrumental to the investment recommendation presented in the report. A critical part of this requirement is to distinguish clearly between opinions and facts.



Members ________ to be in compliance with the Performance Presentation Standards to be in compliance with Standard V (B).

  1. are not required
  2. may be required
  3. are always required
  4. none of these answers
  5. will be required, as of 1/1/2001,
  6. will be required, as of 1/1/2002,

Answer(s): A

Explanation:

The PPS are voluntary standards that a member or a firm may adopt in compiling and presenting performance figures. AIMR adopted and promotes the PPS as a method of obtaining industry wide uniformity in performance presentation information so that results are directly comparable among investment managers. Members are not required to be in compliance with the PPS to be in compliance with Standard V (B).



Which Standard deals with personal integrity and prohibits individual behavior that reflects badly on the investment industry?

  1. III (C)
  2. I (D)
  3. II (B)
  4. III
  5. None of these answers
  6. IV (A)

Answer(s): B

Explanation:

Standard II (B) deals with personal integrity and prohibits individual behavior that reflects adversely on the entire profession.



The Prudent Man Rule, as it was originally written, was clearly oriented towards ________.

  1. charitable organizations
  2. public pension plans
  3. individual clients
  4. personal trust accounts
  5. endowments

Answer(s): D

Explanation:

As enunciated, the concept behind the Prudent Man Rule was clearly oriented towards personal trust accounts.
Under this rule, trustees must be impartial between income beneficiaries and remainder men and must achieve an equitable balance between current income and the preservation of principal in real terms.



Government regulation of charitable organizations and public pension plans:

  1. has increased as these organizations have grown in size and importance.
  2. none of these answers.
  3. has lessened, since there is a growing trend away from charitable organizations since 1989.
  4. is still absent, although there is an effort to change this.

Answer(s): A

Explanation:

Government regulation of charitable organizations and public pension plans has increased as these organizations have grown in size and importance. As such, members who are fiduciaries for these organizations must examine applicable law, client agreement and client guidelines for guidance as to their duties.



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