A researcher presents only favorable information about a product to clients, omitting material risks. Violation?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $25.99Unlock all

Prepare for the Chartered Financial Analyst (CFA) Ethics Test. Study with flashcards and multiple choice questions, each with hints and explanations. Get ready for your exam!

Multiple Choice

A researcher presents only favorable information about a product to clients, omitting material risks. Violation?

Explanation:
Fair dealing requires presenting information to clients in a fair, balanced, and complete manner, so they can assess both benefits and risks. When a researcher showcases only favorable information and omits material risks, the presentation becomes biased and incomplete, preventing clients from making informed decisions. That undermines the trust clients place in financial professionals and violates the obligation to treat clients fairly. So this conduct is a violation of the standard on Fair Dealing.

Fair dealing requires presenting information to clients in a fair, balanced, and complete manner, so they can assess both benefits and risks. When a researcher showcases only favorable information and omits material risks, the presentation becomes biased and incomplete, preventing clients from making informed decisions. That undermines the trust clients place in financial professionals and violates the obligation to treat clients fairly. So this conduct is a violation of the standard on Fair Dealing.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy