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CFA Level I · CFA Level I Exam · Guidance for Standard IV: Duties to Employers

A portfolio analyst at an asset manager is paid a salary by her employer. A client offers her a free holiday trip if the client's account earns a return above a stated level this year. According to Standard IV(B), the analyst should most appropriately:

She should obtain written consent from her employer before accepting. Standard IV(B) covers gifts and benefits, including those paid directly by a client and non-cash ones, that might create a conflict with the employer's interest, and a performance-contingent trip could cause partiality toward that account.

  1. Aobtain written consent from her employer before accepting the arrangementCorrect
  2. Baccept the trip because the client, not a third party, is paying
  3. Caccept the trip if the benefit is not paid in cash

Explanation

Standard IV(B) requires written consent from all parties involved before accepting compensation or benefits that might reasonably be expected to create a conflict with the employer's interest. A contingent trip from a client could cause partiality toward that account. Compensation includes direct payment by the client, and non-cash benefits count too, so the other options are wrong.

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