Question #30
Reading: Reading 42.1 Standards of Professional Conduct Guidance for Standards I
PDF File: Reading 42.1 Standards of Professional Conduct Guidance for Standards I.pdf
Page: 12
Status: Correct
Correct Answer: A
Question
Harold Klein, CFA, is an expert on ethical conduct in the investment banking industry and has been asked by an association of investment bankers to give a presentation on interpreting codes of ethics and standards of practice such as the CFA Institute Code of Ethics and Standards of Professional Conduct. In his presentation, Klein makes two key points: 1. Sound ethical judgment requires careful and thoughtful application of ethical standards which are precise and exacting in nature 2. An ethical professional must begin the ethical decision making process by determining the applicable code and standards that govern the situation. Determine whether Klein's statements are correct or incorrect and state your conclusion. Statement 1 Statement 2
Answer Choices:
A. Incorrect Incorrect
B. Correct Correct
C. Incorrect Correct
Explanation
Statement 1 is incorrect. Ethical standards and codes of conduct are not mathematically
precise and exacting but are ambiguous and open to interpretation. This characteristic
requires wisdom and a mature approach on the part of the professional. Statement 2 is
correct. In deciding what course of action is ethically sound, a professional must first
determine the applicable code and standards and assess their requirements in light of the
circumstances.