Code of Ethics and Standards of Professional Conduct

Correct Answer: Misrepresenting one's educational background or professional qualifications to secure employment at an investment firm.

Misrepresenting one's educational background or professional qualifications to secure employment at an investment firm is the action that would most likely violate the duty to place the integrity of the investment profession above one's own interests. Reporting unethical or illegal conduct of a fellow investment professional to the appropriate regulatory authorities is in line with maintaining the integrity of the profession. Refusing to engage in or facilitate unethical or illegal activities, even under pressure from management, is also upholding the integrity of the investment profession above personal interests such as job security.

Correct Answer: Purchasing shares in a company based on material nonpublic information obtained from a client

Purchasing shares in a company based on material nonpublic information obtained from a client is the most likely violation of the CFA Institute Code of Ethics and Standards of Professional Conduct. Using material nonpublic information for personal gain or to benefit others is considered insider trading and is a clear violation of the Code and Standards. CFA charterholders are expected to maintain the confidentiality of client information and not misuse it for personal advantage. Disclosing confidential client information with the client's explicit written consent is generally permissible and does not violate the Code and Standards. Providing investment recommendations that are suitable given a client's financial situation and objectives is in line with the CFA Institute's principles of putting clients' interests first and providing diligent and competent service.

Correct Answer: The Code and Standards establish the ethical framework for CFA Institute members, candidates, and all investment professionals who adhere to them.

The CFA Institute Code of Ethics and Standards of Professional Conduct establish the ethical framework for CFA Institute members, candidates, and investment professionals who voluntarily adhere to them. They are not legally binding regulations that all financial professionals must follow. The Code and Standards provide ethical guidelines and principles for investment professionals, but do not give specific investment recommendations for managing client portfolios. Therefore, the statement that the Code and Standards establish the ethical framework for CFA Institute members, candidates, and those who voluntarily follow them is the most accurate among the given options.