2. Duties to Clients:
Question:
Sarah, a CFA charterholder, provides investment advice to her clients. She recommends a new mutual fund without thoroughly investigating the risks involved. However, the fund is widely regarded as a safe investment by many analysts. Has Sarah violated any CFA Standards of Professional Conduct?
- A. No, because the mutual fund is widely regarded as safe.
- B. Yes, because she failed to disclose all relevant information to the client.
- C. Yes, because she did not conduct proper due diligence.
- D. No, because she acted in her clients’ best interest.
Admin Answered question October 11, 2024
Answer:
C. Yes, because she did not conduct proper due diligence. Sarah violated Standard V(A) by failing to exercise diligence and thoroughness in evaluating the fund before making a recommendation to her clients.
Admin Answered question October 11, 2024
