Question #38
Reading: Reading 42.2 Standards of Professional Conduct Guidance for Standards II
PDF File: Reading 42.2 Standards of Professional Conduct Guidance for Standards II.pdf
Page: 21
Status: Correct
Correct Answer: B
Question
Which one of the following least accurately describes the CFA Institute Standard about using material nonpublic information?
Answer Choices:
A. An analyst may violate this Standard by passing information to others even when it has been obtained from outside the company
B. An analyst may use nonmaterial nonpublic information as long as it has been developed under the Mosaic Theory
C. An analyst using material nonpublic information may be fined by CFA Institute
Explanation
There is no provision for CFA Institute to issue fines to members. Members may not use
material nonpublic information for trading purposes. Nonmaterial, nonpublic information
may be used together with analysis of public information under the Mosaic Theory.
(Module 42.3, LOS 42: II(A))