CFA Level I · CFA Level I Exam · Ethics and Trust in the Investment Profession
According to the CFA Institute view, a firm's code of ethics is best described as:
A code of ethics is necessary but insufficient. It is a critical first step, but it must be integrated into the firm's culture and reinforced by teaching and practicing ethical decision-making, or it risks becoming a largely ignored document.
- Anecessary but insufficient without integration into the firm's cultureCorrect
- Bsufficient on its own to promote ethical behavior among employees
- Ca replacement for ethical decision-making skills among staff
Explanation
The text says that adopting a code of ethics is a critical first step, but a code, while necessary, is insufficient. It must be integrated into the firm's fabric, and employees need practiced ethical decision-making skills. It therefore neither suffices alone nor replaces those skills.
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