CFA Level II Vignettes Ethics Standards Performance Reporting MCQs Test 1

Practice CFA 2026 Level II Vignettes Ethics Standards MCQs from Performance Reporting. Get instant results with Explanation.

Practice Quiz 1 for "Performance Reporting" (Ethics Standards). Total 30 MCQs available, split into 3 quizzes. Start with the fundamentals and build a strong base. Mastering these concepts is essential for securing a high percentile in CFA.

General10 MCQs

1. Vignette 1: PerformancePlus - Michael Harrison, CFA, presents a client report showing a 15% return for an equity portfolio, compared to a cash benchmark return of 2%. The appropriate benchmark is an equity index that returned 12%. Has Harrison violated the Standards?

A. Acceptable because the cash benchmark is conservative and highlights performanceB. Acceptable if the client is aware of the benchmark choiceC. Unacceptable because the benchmark is not appropriate and misrepresents performance under Standard III(D)D. Unacceptable only if the portfolio underperforms the cash benchmark

2. Harrison shows a client a gross return of 18% without deducting the 2% management fee. The net return is 16%. Which Standard has Harrison violated?

A. Standard III(D) - Performance PresentationB. Standard I(C) - MisrepresentationC. Standard V(B) - Communication with Clients and Prospective ClientsD. Standard VI(A) - Disclosure of Conflicts

3. Harrison presents a 5-year track record that includes only the best 3 years and excludes the 2 worst years. Which Standard has Harrison violated?

A. Standard I(C) - MisrepresentationB. Standard V(B) - Communication with Clients and Prospective ClientsC. Standard VI(A) - Disclosure of ConflictsD. Standard III(D) - Performance Presentation

4. Harrison presents a composite performance that includes only accounts with returns above 10% and excludes underperforming accounts. Which Standard has Harrison violated?

A. Standard I(C) - MisrepresentationB. Standard III(D) - Performance PresentationC. Standard V(B) - Communication with Clients and Prospective ClientsD. Standard VI(A) - Disclosure of Conflicts

5. Harrison tells a client that the portfolio's historical return "guarantees future performance." Which Standard has Harrison violated?

A. Standard I(C) - MisrepresentationB. Standard V(B) - Communication with Clients and Prospective ClientsC. Standard III(D) - Performance PresentationD. Standard VI(A) - Disclosure of Conflicts

General10 MCQs

6. Vignette 2: AccurateReturns - Jennifer Thompson, CFA, presents a client's portfolio return as 20% for the year. However, the client made a large contribution during the year, which significantly inflated the return. Thompson did not disclose this. Has Thompson violated the Standards?

A. Acceptable because Thompson presented the total returnB. Acceptable if the client requested the simplified returnC. Unacceptable only if the contribution was significantD. Unacceptable because Thompson violated Standard III(D) by not presenting a time-weighted return that excludes external cash flows

7. Thompson presents a one-year return of 30% as evidence of the portfolio's long-term success, without showing the 5-year or 10-year returns. Which Standard has Thompson violated?

A. Standard III(D) - Performance PresentationB. Standard I(C) - MisrepresentationC. Standard V(B) - Communication with Clients and Prospective ClientsD. Standard VI(A) - Disclosure of Conflicts

8. Thompson tells clients that the performance results are "audited and verified" when they are simply internal calculations. Which Standard has Thompson violated?

A. Standard I(C) - MisrepresentationB. Standard III(D) - Performance PresentationC. Standard V(B) - Communication with Clients and Prospective ClientsD. Standard VI(A) - Disclosure of Conflicts

9. Thompson presents performance gross of fees in some periods and net of fees in others, without disclosing the difference. Which Standard has Thompson violated?

A. Standard I(C) - MisrepresentationB. Standard V(B) - Communication with Clients and Prospective ClientsC. Standard III(D) - Performance PresentationD. Standard VI(A) - Disclosure of Conflicts

10. Thompson presents a "model portfolio" return to clients as if it were the actual return of their individual portfolios, without clearly stating that it is a model. Which Standard has Thompson violated?

A. Standard I(C) - MisrepresentationB. Standard V(B) - Communication with Clients and Prospective ClientsC. Standard VI(A) - Disclosure of ConflictsD. Standard III(D) - Performance Presentation

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Conducting Body: CFA Institute

Frequency: 4 times a year (February, May, August, November) | Time: 70 Minutes

Negative Marking: No

⚡ Test Pattern (Total: 90 MCQs):

Subject breakdown not available.

Merit Formula: -

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CFA Level II Vignettes Ethics Standards Performance Reporting MCQs Test 1

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