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CFA Level I · CFA Level I Exam · Ethics and Trust in the Investment Profession

An analyst faces a situation where the choice between right and wrong is unclear and feels pressure to cut corners. Which statement from the CFA Institute materials most accurately describes the underlying issue?

The issue is that situational influences can overpower the best of intentions. The materials note that many decisions are not clearly right or wrong and that even well-intentioned professionals may be tempted to cut corners, so a framework and practiced skills are needed.

  1. ASituational influences can overpower the best of intentions, even for well-intentioned professionalsCorrect
  2. BLocal laws always define the correct action, so ambiguity should not arise
  3. COnly professionals with poor character are tempted to cut corners

Explanation

The materials say many decisions are not unambiguously right or wrong and that situational influences can overpower the best of intentions. The other options contradict this, since the Code applies regardless of local laws and even well-intentioned people are tempted.

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