NOTE: Reference to the terms Code and Standards in this section refers to the CFA Institute Code ofEthicsand/ ortheCFAInstituteStandards ofProfessional Conduct.

Question:

You have just been employed as the CFA Institute compliance officer for your firm.The firm,which operates in the financial services area and employs a number of CFA members who arebothfullCharterholdersandothers,justlikeyou,currentlystudyingtheCFAProgram.

Required:

a. Whyaretheissues of'guarantees'animportantissueforconsiderationintheinteractions betweentheadviserandtheclient,

particularlyinrelationtoCFAStandard1(C)?Brieflyjustifyyourconclusions.

Hint:That is, why does the adviser need to be wary of the manner in which they expressexpected future investment returns to clients, particularly in relation to any guaranteedreturns?

b.Recommendations for the firm complying with CFA Standard 1 (C) includes exercising careand due diligence when relying on third-party

information.Provide your staff withrelevant practical issues to

consider when seeking to meet this requirement.Briefly

justifyyourconclusions.