Standard IV (B.3) - Fair Dealing: Examining CFA® Level 1 Test Prep

Standard IV (B.3) - Fair Dealing: CFA® Level 1 Test Prep

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Question

Which of the following statements is NOT true relating to Standard IV (B.3) - Fair Dealing?

Answers

A. This standard covers the conduct of two groups: those who prepare recommendations and those who take investment action.

B. Members shall deal equally and objectively with all clients.

C. Only through the fair treatment of all parties can the investment management profession maintain the confidence of the investing public.

D. None of these answers.

E. This standard covers investment action such as general purchases, new issues, or secondary offerings.

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Explanations

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A. B. C. D. E.

The operative word is "fairly," not "equally." The term "fairly" implies that the member must take care not to discriminate against any customers or clients when disseminating investment recommendations. Members could not possibly reach all clients "equally" (i.e., simultaneously). In addition, each client has unique needs, investment criteria and investment objectives.

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