Question

Which of the following statements clearly CONFLICTS with the recommended procedures for compliance presented in the CFA Institute Standards of Practice Handbook?

a) "I always rely on insider information for investment decisions."
b) "I disclose any potential conflicts of interest to my clients."
c) "I prioritize my personal interests over my clients' interests."
d) "I adhere to the principles of fairness and diligence in my work."

Answer 1

The statement 'I always rely on insider information for investment decisions' conflicts with CFA Institute standards, which ban the use of such information. Option A,C is correct.

Step-by-step explanation:

The statement that clearly conflicts with the recommended procedures for compliance presented in the CFA Institute Standards of Practice Handbook is: "I always rely on insider information for investment decisions."

This statement is in direct violation of the CFA Institute's Code of Ethics and Standards of Professional Conduct which prohibit the use of material nonpublic information in making investment decisions. It undermines the principles of fairness, integrity, and professionalism that CFA charterholders are bound to uphold.

Relying on insider information is contrary to the practice of disclosing any potential conflicts of interest, adhering to principles of fairness and diligence, and always putting clients' interests ahead of one's own personal interests.

The statement that clearly conflicts with the recommended procedures for compliance presented in the CFA Institute Standards of Practice Handbook is statement c) "I prioritize my personal interests over my clients' interests." The CFA Institute Standards of Practice Handbook emphasizes the importance of prioritizing clients' interests and avoiding conflicts of interest.

By prioritizing personal interests over clients' interests, the statement conflicts with the recommended procedures for compliance.