CFA Level II Vignettes Ethics Standards Private Wealth MCQs Test 1

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

Practice Quiz 1 for "Private Wealth" (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: Trust & Estate Advisors - Sarah Thompson, CFA, manages a private wealth practice. Her firm receives an IPO allocation of 10,000 shares. Thompson allocates 80% of the shares to accounts of her family members and only 20% to non-family clients. Has Thompson violated the Standards?

A. Acceptable because all accounts belong to family members who are also clientsB. Unacceptable because Thompson violated Standard III(A) by failing to act fairly and in the best interest of all clientsC. Acceptable if the family accounts had larger asset basesD. Unacceptable only if the IPO shares declined in value

2. Following the previous scenario, Thompson recommends a private equity investment with a 10-year lock-up to a client who is 78 years old and has limited liquid assets. Thompson did not conduct a suitability assessment. Which Standard has Thompson violated?

A. Standard III(A) - Loyalty, Prudence, and CareB. Standard III(D) - Performance PresentationC. Standard V(A) - Diligence and Reasonable BasisD. Standard III(C) - Suitability

3. Thompson recommends a hedge fund to her high-net-worth clients. Thompson personally owns a 15% stake in the hedge fund. She does not disclose this ownership. Which Standard has Thompson violated?

A. Standard VI(A) - Disclosure of ConflictsB. Standard III(A) - Loyalty, Prudence, and CareC. Standard IV(A) - Loyalty to EmployerD. Standard I(B) - Independence and Objectivity

4. Thompson discusses the terms of a client's trust, including beneficiary names and asset values, with a colleague at a dinner party. She does not mention the client's name. Has Thompson violated the Standards?

A. Standard III(A) - Loyalty, Prudence, and CareB. Standard I(B) - Independence and ObjectivityC. Standard III(E) - Preservation of ConfidentialityD. Standard IV(A) - Loyalty to Employer

5. Thompson plans to leave her firm. Before resigning, she copies the client list, contact details, and investment objectives of her top 50 clients to use for her new practice. Which Standard has Thompson violated?

A. Standard III(A) - Loyalty, Prudence, and CareB. Standard IV(A) - Loyalty to EmployerC. Standard VI(A) - Disclosure of ConflictsD. Standard I(C) - Misrepresentation

General10 MCQs

6. Vignette 2: Legacy Wealth Management - James Harrison, CFA, is a private wealth manager. His firm mandates that all client portfolios invest at least 50% in the firm's proprietary investment products. Harrison enforces this policy. Has Harrison violated the Standards?

A. Acceptable because the policy applies uniformly to all clientsB. Acceptable if the proprietary products are competitiveC. Unacceptable because it violates Standard III(A) by prioritizing firm interests over client interestsD. Unacceptable only if the proprietary products underperform

7. Harrison recommends that a client invest 60% of their portfolio in a single commercial real estate project. The client's IPS requires diversification across asset classes. Which Standard has Harrison violated?

A. Standard III(A) - Loyalty, Prudence, and CareB. Standard III(D) - Performance PresentationC. Standard V(A) - Diligence and Reasonable BasisD. Standard III(C) - Suitability

8. Harrison accepts an all-expenses-paid vacation to a private island from a wealthy client whose portfolio he manages. Harrison does not disclose this to his employer. Which Standard has Harrison most likely violated?

A. Standard I(B) - Independence and ObjectivityB. Standard III(A) - Loyalty, Prudence, and CareC. Standard VI(A) - Disclosure of ConflictsD. Standard IV(A) - Loyalty to Employer

9. Harrison recommends a complex family office investment strategy to clients based on a single presentation from the family office, without reviewing the offering documents or independent third-party analysis. Which Standard has Harrison violated?

A. Standard III(C) - SuitabilityB. Standard V(A) - Diligence and Reasonable BasisC. Standard I(C) - MisrepresentationD. Standard VI(A) - Disclosure of Conflicts

10. Harrison presents a client's portfolio performance showing a return of 12% compared to a 3% cash return. The portfolio's appropriate benchmark is a balanced 60/40 index that returned 10%. 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

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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 Private Wealth MCQs Test 1

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