- CFA Level 2: Ethic & Professional Standards – Introduction
- The Code of Ethics – Short Version of the Six Components
- The Seven Standards for Professional Conduct
- CFA Soft Dollar Standards - Overview
- CFA Soft Dollar Standards
- Research Objectivity Standards (ROS)
- CFA Level II Ethics – Exam Thinking and Recommendations
- The Prudent Investor Rule
CFA Level II Ethics – Exam Thinking and Recommendations
- Understand the difference between a member/candidate wrongly using material non-public information versus appropriately applying the mosaic theory.
- Know that CFAI may present an explicit standard violation and expect you to identify the most relevant standard that was violated.
- “Written consent” includes email documentation.
- Know that the new standard for a fiduciary is the “Prudent Investor Rule”, which allows the investment manager to minimize risk in a portfolio context (unlike the outdated “Prudent Man Rule”).
Test Preparation Recommendation
- Spend four hours reading the material and taking notes.
- Spend one to two hours creating flash cards.
- Spend four hours taking practice questions.
- Dedicate small parts of every week to reviewing this topic throughout your preparation.
- Expect the exam to bring a few “obscure” questions and isolate time the week before the exam to review official material with this in mind.
Ethics and Professional Standards is a great starting section. You can ease into your study plan with it, but do not underestimate its importance and continuously review the material throughout your preparation to keep concepts fresh. But remember that it is a mandatory 70%+ section!
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