Parts of the Standards to Observe: CFA Level 1 Exam

B

Some aspects of the Performance Presentation Standards are mandatory and must be observed, while other aspects are recommended.

In the context of the CFA® Level 1 exam, the question asks you to identify the term that correctly completes the sentence about the standards. Let's analyze each answer choice to determine the most appropriate one.

A. Restraining: This term implies that the standards impose limitations or restrictions. However, the CFA® standards are not intended to restrict or limit the actions of financial professionals but rather provide guidelines for ethical behavior and professional conduct. Therefore, this answer choice is unlikely to be correct.

B. Mandatory: This term means that the standards must be followed without exception. In the CFA® program, adherence to the standards is indeed mandatory for all charterholders and candidates. The CFA® Institute requires members to comply with these standards to maintain the highest levels of professionalism and integrity. This answer choice accurately reflects the requirement to observe the standards.

C. Recommended: This term suggests that adherence to the standards is optional or advised but not obligatory. However, the CFA® standards are not merely recommendations or suggestions; they are binding rules that all CFA® charterholders and candidates must follow. Therefore, this answer choice is incorrect.

D. Suggested: This term implies that the standards are proposed or put forward as ideas for consideration. Again, the CFA® standards go beyond being mere suggestions and are instead mandatory guidelines for ethical conduct. Therefore, this answer choice is unlikely to be correct.

E. Inhibiting: This term suggests that the standards restrict or impede actions or behaviors. However, the purpose of the CFA® standards is not to inhibit or hinder professionals but rather to ensure ethical practices and maintain the integrity of the financial industry. Therefore, this answer choice is incorrect.

Based on the analysis, the correct answer is B. Mandatory, as it accurately reflects the requirement to observe the CFA® standards.