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

An analyst usually evaluates decisions by profit and loss. Which approach is most consistent with the CFA Institute guidance on ethical decision making?

The analyst should analyze the decision from an ethical perspective in addition to the profit/loss outlook, using an ethical decision-making framework before acting. The framework helps examine conduct amid conflicting interests rather than waiting for regulators or discarding business analysis.

  1. AUse the ethical lens only if a regulator opens an inquiry
  2. BAnalyze the decision from an ethical perspective as well, using a framework applied before actingCorrect
  3. CReplace the business outlook with an ethical one so profit is ignored

Explanation

The text says that although professionals are used to a profit/loss outlook, it is critical to also analyze decisions from an ethical perspective, and that establishing a framework before deciding to act is a crucial step. It does not say to ignore business considerations, nor to wait for regulators.

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