Question #43 - Reading 42.4 Standards of Professional Conduct Guidance for Standards IV

Reading: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV

PDF File: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV.pdf

Page: 19

Status: Correct

Correct Answer: A

Shared Context

- With regard to Standard VII(B)—Reference to CFA Institute, the CFA Designation, and the CFA Program: A) neither Montpier nor Taylor is in compliance. B) both Montpier and Taylor are in compliance. C) only Taylor is in compliance.

Question

Which of the following statements regarding Standard IV(A)—Loyalty to Employer is CORRECT?

Answer Choices:

A. Neither Taylor nor Montpier is in violation of the Standard

B. By accepting compensation for his role in the medical study, Taylor is violating the Standard

C. Despite getting written permission from her client to consult, Montpier is not in compliance with the Standard

Explanation

Montpier needs to get permission from both the client and her employer before she can begin to consult; since she has not received permission from World Class, she is not in compliance. Neither Taylor's use of rivals' research nor his participation in a medical study violate the Standard. Standard IV(A) addresses outside income, not research methods. And while the medical-study payment is certainly income, it is not in competition with his firm, and as such does not violate the Standard.

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