CFA Level 1 Exam-tips Blog
Ethics
By Dr. R. Douglas Van Eaton, CFA - Level 1 Manager
Ethics--Study Session 1 |
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Ethics is the key to your success on the exam. Although you can fail ethics and still pass the exam, I wouldn't recommend it. Ethics is worth 15%. Hence, you should make ethics a top priority. Study the details—the ethics questions can be tricky, and little details can trip you up. Be prepared.
In addition to starting early, study the ethics material more than once. Ethics is one of the keys to passing the exam. It would be optimal if you could study ethics in January and again in May--and review the Standards of Practice Handbook one more time the day before the exam.
Standards of Practice Handbook
We recommend that you buy and read the original Standards of Practice Handbook. Although we are very proud of our topic reviews of the ethics material, there are two reasons we recommend that you buy the original Standards of Practice Handbook: (1) you are a CFA candidate, and as such, you have pledged to abide by the CFA Institute Standards; (2) the ethics questions on the actual exam can be an exercise in minutia, and you will be much better off if you read both our topic reviews of the Standards and the original Handbook.
The recommendations for compliance are stressed at Level III. For Level I, you need to recognize violations of the Standards and to know the elements of the Code. With this in mind, focus strongly on the guidance and examples for each Standard.
Code and Standards
Questions about the Standards will largely be application questions. You will most likely be given a situation and asked to identify whether a violation occurs, what the violation is, or what the most (or least) appropriate course of action would be.
Global Investment Performance Standards (GIPS)? GIPS are also included in the ethics section. In this area, you should focus on the objectives, key characteristics, and the five main components of the GIPS standards. Not too many pages, but you need to know it all. The devil is in the details here.
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