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Ethical and Professional Standards practice

Try 11 questions from the first JS Insights Ethics module, with each answer and explanation revealed only when you choose to check it. Continue in the JS Insights Level I app for practice across the complete ten-topic course.

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11free web questions
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10Level I topics
2027curriculum year

First-module sample

11 questions with answers and explanations.

Work from start to finish through the first Ethics module. Each explanation identifies the governing concept and the decisive fact. Answers are collapsed by default.

This free web set is drawn from the current JS Insights Level I question bank.

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Module 1

Ethics, Trust, the Code, and Enforcement

Questions 1-11 · 11 questions

Question 1 · Module 1

A country's advertising law allows advisers to omit transaction costs from a short online promotion. Elena includes expected returns but omits large recurring costs, even though the omission is likely to mislead ordinary clients. What is Elena's most appropriate course of action?

  1. ARely on the legal exemption when deciding which costs the promotion must disclose.
  2. BWithdraw both returns and costs, since a short promotion cannot meet ethical disclosure duties.
  3. CConsider the effect on clients and communicate the costs fairly despite the legal permission.
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Question 2 · Module 1

Which statement best explains why trust has economic value in investment markets?

  1. ATrust reduces verification and monitoring costs and supports participation.
  2. BTrust guarantees that every investment recommendation will be profitable.
  3. CTrust eliminates the need for regulation and professional competence.
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Question 3 · Module 1

When facing an unfamiliar ethical problem, a portfolio manager should most appropriately begin by:

  1. Aidentifying the facts, affected stakeholders, duties and gaps in the available information.
  2. Bchoosing the response that best protects her professional reputation before consulting others.
  3. Cfinding a similar case with a favourable outcome and using its result to select a response.
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Question 4 · Module 1

A normally careful analyst approves a weak report minutes before a deadline because everyone on the team says, "Just send it." Which situational influence most directly increases the ethical risk?

  1. AA long-term focus reinforced by the team's shared investment horizon.
  2. BTime pressure combined with conformity to the team's stated preference.
  3. CIndependent escalation reinforced by a request for additional review.
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Question 5 · Module 1

Which combination most strongly supports classifying investment management as a profession?

  1. ASpecialized knowledge, service orientation, common standards, continuing competence, and oversight.
  2. BSpecialised expertise, high compensation, privileged information and freedom from oversight.
  3. CCommercial success, guaranteed admission, common branding and exclusive loyalty to employers.
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Question 6 · Module 1

A candidate's employer has no policy on discussing exam content. After an exam, the candidate shares a confidential tested topic in a staff chat. Who bears responsibility under the Code and Standards?

  1. AThe employer alone, because its missing policy left the candidate without workplace guidance.
  2. BThe candidate, whose personal obligations apply despite the employer's missing policy.
  3. CNeither party, because the disclosure remained within a private workplace discussion.
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Question 7 · Module 1

Following a professional conduct investigation, which sanction is within CFA Institute's authority?

  1. AImposing imprisonment as punishment for a candidate's criminal professional misconduct.
  2. BWithdrawing the securities licence that allows the candidate to practise in the jurisdiction.
  3. CSuspending the candidate's participation in the CFA Program following disciplinary proceedings.
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Question 8 · Module 1

Professional Conduct receives a credible anonymous public post alleging that a member fabricated credentials. Which statement is most accurate?

  1. AIt can provide grounds to open an investigation and request the member's response.
  2. BIt cannot initiate a case unless the allegation also appears in the member's annual disclosure.
  3. CIt must be disregarded despite corroboration because the original source is anonymous.
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Question 9 · Module 1

Which statement most accurately distinguishes the Code of Ethics from the Standards of Professional Conduct?

  1. AThe Code governs charterholders' conduct; the Standards govern candidates' conduct.
  2. BThe Code contains criminal law, while the Standards contain voluntary suggestions.
  3. CThe Code states professional ideals; the Standards set enforceable conduct requirements.
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Question 10 · Module 1

Which action is most directly part of a member's continuing professional conduct obligations?

  1. ACompleting the required annual professional conduct self-disclosure truthfully and accurately.
  2. BAssigning conduct self-disclosure responsibilities to the employer's compliance department.
  3. CPublishing suspected violations before investigation to satisfy the member's reporting obligations.
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Question 11 · Module 1

A firm's compliance manual permits an analyst to publish a recommendation on a company whose shares she owns, provided the holding is listed in the report's appendix. The analyst follows the manual exactly. Her colleague argues that the analysis is nonetheless incomplete. The colleague's argument is best described as:

  1. Aincorrect, because following the firm's written disclosure policy resolves the ethical question
  2. Bcorrect, because selling the personal holding is required before publishing the research
  3. Ccorrect, because ethical analysis also considers whether disclosure effectively informs the reader
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These independently written questions and slides are educational resources from JS Insights. They are not official CFA Institute curriculum materials or examination questions. Candidates should use the current official curriculum, topic outline and errata as the authoritative sources.

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