CFA Level I - Learning Outcomes

Question 1

1A: Explain Ethics

Answer 1

Ethics is the study of right behavior (i.e. that which has the best possible aggregate outcome).

Question 2

1B: Describe the role of a code of ethics in defining a profession.

Answer 2

A code of ethics provides a baseline expectation for the spectrum of behavior of all members of a profession. This can increase the confidence of current and prospective consumers of the profession’s goods and services.

Question 3

1C: Identify challenges to ethical behavior.

Answer 3

Anything that could lead to a decision that fails to provide the greatest possible benefit to society is a challenge to ethical behavior. These include situational influences,…

Question 4

1D: Describe the need for high ethical standards in the investment industry.

Answer 4

The investment industry, more than almost any other, is based on trust. Trust that the industries professional will act in the best interest of clients. Trust that is often broken.

Question 5

1E: Distinguish between ethical an legal standards.

Answer 5

A legal standard is one that is enforcible by law. An ethical standard is one that is enforcible by personal will. A legal act need not be in the best interest of all affected parties, but an ethical one should be.

Question 6

1F: Describe and apply a framework for ethical decision making.

Answer 6

• Gather all pertinent information
• Identify all affected parties
• …