📖 Standards I-V 中测复习

1. Five Standards at a Glance

2. Standard I: Professionalism — Key Review

I(A) Knowledge of the Law

Know the law → Comply with the law → If CFA Code is stricter → Follow CFA Code
                                     → If law is stricter → Follow the law
→ Know of a violation → Must report → Dissociate from the violating environment

I(B) Independence & Objectivity

• Do not accept gifts or benefits that could affect independent judgment
• Issuer-paid research must be disclosed
• Issuer pressure must not influence ratings or recommendations
• Internal firm pressure (e.g., investment banking pressuring research) applies equally

I(C) Misrepresentation

• Must not knowingly make false statements
• Must not omit material information (omission = misrepresentation)
• Must not plagiarize
• Citations must identify sources

I(D) Misconduct

• Involving fraud, deceit, or dishonest acts
• Conduct that reflects poorly on professional integrity
• Note: Not all illegal acts are I(D) violations — must relate to professional integrity

3. Standard II: Integrity of Capital Markets — Key Review

II(A) Material Nonpublic Information (MNPI)

Information assessment flow:
Is the information material? → Would a reasonable investor consider it important
    │
Is the information nonpublic? → Has it been widely disseminated to the market
    │
If both are yes → This is MNPI → Must not trade or cause others to trade
                    │
                    → Permitted action: Make reasonable efforts to achieve public dissemination

II(B) Market Manipulation

• Must not distort prices or create false trading volume
• Must not spread false rumors to influence the market
• Must not create a false impression of activity through fictitious trades (wash trading)
• Must distinguish between legitimate trading strategies and manipulative behavior

4. Standard III: Duties to Clients — Key Review

III(A) Loyalty, Prudence, Care

Client interests first
    │
    ├── Fiduciary duty: The greater the client's reliance, the heavier the duty
    ├── Soft dollars: Must directly benefit the client
    └── Proxy voting: Must be exercised in the client's interest

III(B) Fair Dealing

• Must not allocate unfairly among clients
• Trade allocation: Pro-rata is best practice
• IPO allocation: Particularly sensitive; must not favor certain clients
• Dissemination of recommendations: All clients should receive them simultaneously or as close as possible

III(C) Suitability

Product recommendation → Does it match the client's:
    ├── IPS (Investment Policy Statement)
    ├── Risk tolerance
    ├── Investment objectives and constraints
    ├── Financial situation
    └── Investment experience and knowledge

III(D) Performance Presentation

• Must present investment performance fairly, accurately, and completely
• Must not selectively display favorable periods
• Must comply with GIPS (if applicable)
• Simulated performance must be clearly labeled

III(E) Preservation of Confidentiality

• Client information = confidential
• Confidentiality obligation continues even after leaving employment
• Exceptions: Required by law, client's written consent, CFA Institute investigation

5. Standard IV: Duties to Employers — Key Review

IV(A) Loyalty

While employed:
    ├── Must not compete with employer
    ├── Must not appropriate employer opportunities for personal benefit
    └── Upon leaving: May prepare to compete, but may not actually begin competing before departure

After departure:
    └── May use skills and experience gained from employer, but may not take employer property

IV(B) Additional Compensation

• Work-related compensation from third parties → must obtain employer's written consent
• Client gifts → distinguish service fees (disclosure required) from small token gifts
• Prior disclosure > subsequent disclosure

IV(C) Supervisory Responsibility

• Supervisors have a duty to prevent subordinate violations
• Must establish and enforce compliance procedures
• Must take action upon discovering a violation
• Cannot simply claim "I didn't know" as a defense

6. Standard V: Investment Analysis & Recommendations — Key Review

(Refer to L062 Comprehensive Review for details)

7. Cross-Standard Violation Analysis (Core Exam Topic)

7.1 Insider Information + Client Duties = ?

7.2 Employer Interests vs. Client Interests

7.3 Independence + Suitability + Fair Dealing

8. Mid-Assessment Questions (15 Questions)

Q1. Which of the following is NOT a criterion for determining whether information is "material"?

A) Whether a reasonable investor's decision would be affected by the information
B) Whether the information could cause a significant change in stock price
C) Whether the information is known to the company's CEO
D) Whether similar information has been considered material in the past

Q2. The correct understanding of the Mosaic Theory is:

A) Combining public information with non-material nonpublic information for analysis is legitimate
B) Combining public information with material nonpublic information for analysis is legitimate
C) All forms of information combination analysis should be prohibited
D) The Mosaic Theory applies only to institutional investors

Q3. An analyst discovers serious financial fraud in a stock recommended by the employer. The analyst should first:

A) Immediately sell the stock held personally
B) Contact regulators to report
C) Report through internal firm compliance procedures
D) Notify clients to sell immediately

Q4. A hedge fund manager simultaneously manages two accounts: a fund charging 2/20 and a separately managed account charging 1/10. In IPO allocation, the manager should:

A) Prioritize the higher-fee account
B) Prioritize long-term clients
C) Allocate fairly on a pro-rata basis
D) Allocate randomly

Q5. An analyst attends a luxury dinner organized by an issuer, valued at approximately $500. The correct approach is:

A) Decline or pay out of pocket to maintain independence
B) Accept but report to the employer
C) Accept and disclose in the research report
D) Accept but delay the next research report

Q6. A departing analyst takes a personally developed valuation model (created on company computers during work hours). This violates:

A) IV(A) — the model is employer property
B) V(C) — record retention
C) I(C) — misrepresentation
D) No violation; it is a personal work

Q7. An investment manager uses selective data in quarterly client reports, showing only profitable trades and omitting loss-making trades. This primarily violates:

A) III(A) — Loyalty
B) III(B) — Fair Dealing
C) III(D) — Performance Presentation
D) V(B) — Communication with Clients

Q8. Regarding the relationship between loyalty to employers (IV(A)) and loyalty to clients (III(A)):

A) Loyalty to employers always takes priority
B) Loyalty to clients always takes priority
C) Both exist in parallel; when they conflict, client interests take priority
D) Depends on the specific terms of the employment contract

Q9. An analyst learns from the CFO that the company is about to issue a profit warning (not yet public). The analyst should:

A) Immediately inform all clients of this information
B) Not trade, but hint to clients to watch out for risks
C) Not trade, not disseminate, report to compliance, and urge the company to disclose as soon as possible
D) Sell personal holdings

Q10. A supervisor discovers that a subordinate is suspected of insider trading but takes no action because the subordinate's performance is outstanding. The supervisor:

A) Has not violated — did not personally trade
B) Has not violated — it is unknown whether a violation actually occurred
C) Has violated IV(C) supervisory responsibility
D) Has only violated internal firm rules

Q11. Which of the following does NOT require the employer's written consent?

A) Accepting a $100 meal from a client
B) Accepting additional work-related compensation from a third party
C) Engaging in business that competes with the employer outside of work
D) Accepting "research sponsorship" from an issuer

Q12. GIPS (Global Investment Performance Standards) is an extension of which standard?

A) III(A)
B) III(C)
C) III(D)
D) V(A)

Q13. An analyst cites others' research in a report without attribution (for internal sharing only, not commercial use). This:

A) Is not a violation because it is for internal use
B) Violates I(C) — plagiarism
C) Violates V(A) — reasonable basis
D) Is not a violation as long as marked "for reference only"

Q14. Which of the following involves both II(A) and III(A) simultaneously?

A) An analyst selects a stock without conducting sufficient research
B) An analyst uses insider information to trade for client profit
C) An analyst recommends a stock after accepting kickbacks from the issuer
D) An analyst plagiarizes others' work in research

Q15. "As a CFA charterholder, you must comply with the strictest applicable rule." This principle originates from:

A) I(A) Knowledge of the Law
B) I(B) Independence & Objectivity
C) III(A) Loyalty
D) IV(A) Loyalty to Employer

9. Answer Key & Explanations

1. C — Whether the CEO knows is not a legal criterion for "materiality." The key is the reasonable investor's perspective.
2. A — Core of the Mosaic Theory: public information + non-material nonpublic information = legitimate analysis.
3. C — Discovering problems with employer products should first go through internal compliance channels; bypassing the chain may cause the individual to violate rules before compliance approves.
4. C — III(B) requires fair allocation; allocation cannot be determined by fee levels.
5. A — $500 exceeds the acceptable range; best practice is to decline or pay out of pocket.
6. A — Work completed using company resources (computers, work hours) belongs to the employer.
7. C — Selective data presentation violates III(D)'s requirement for fair and complete performance presentation.
8. C — Loyalty to employers cannot override loyalty to clients.
9. C — Correct handling of MNPI: do not trade, do not disseminate, report to compliance, urge public disclosure.
10. C — A supervisor's knowing inaction regarding subordinate violations is a direct violation of IV(C).
11. A — Modest meals or entertainment do not trigger IV(B)'s written consent requirement.
12. C — GIPS is a standardized extension of III(D) performance presentation standards.
13. B — Plagiarism, whether public or internal, is an I(C) violation.
14. B — Insider information = II(A); trading for clients = involves III(A) fiduciary duty.
15. A — I(A) establishes the "strictest applicable standard" principle.

Next L065: Standard VI(A) — Disclosure of Conflicts of Interest