115 CFA
File: Reading 2 - Code of Ethics - LOS b. six components seven standards

b. state the six components of the Code of Ethics and the seven Standards of Professional Conduct

Command words

  • State:
    • To express in words "State the probability of an event in terms of odds for or against the event"
    • to provide "State the formula for the international capital asset pricing model"

Flash cards

What is the name of the framework for ethical decision-making in the investment profession?
The Code of Ethics

What are the six components of the Code of Ethics?
1. Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.
2. Place the integrity of the investment profession and the interests of clients above their own personal interests.
3. Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.
4. Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.
5. Promote the integrity and viability of the global capital markets for the ultimate benefit of society.
6. Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.

Who does the Code of Ethics apply to?
The Code of Ethics applies to CFA institute's members, CFA charterholders, and CFA candidates

Investment professionals are expected to deal with integrity when dealing with which 3 groups of people?
1. Clients
2. Public
3. Fellow members

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