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CFA Level I · CFA Level I Exam · Guidance for Standard I: Professionalism

An equity analyst at a brokerage firm receives a modest branded notebook and a lunch from a company she covers during a routine site visit. Under Standard I(B), her most appropriate course of action is to:

She may accept the items. Standard I(B) treats modest gifts and entertainment as acceptable. Only gifts that could reasonably be expected to threaten independence and objectivity must be rejected. A branded notebook and a lunch would not reasonably compromise her judgment, so refusing contact or dropping coverage is unnecessary.

  1. Aaccept, because modest gifts and entertainment are acceptableCorrect
  2. Brefuse all contact with the company's management
  3. Creturn the items and stop covering the company

Explanation

The Standard says modest gifts and entertainment are acceptable, while members must reject offers that could reasonably be expected to threaten independence and objectivity. A notebook and a lunch are modest and would not reasonably compromise her. Refusing all contact or dropping coverage goes beyond what the Standard requires.

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