CFA Level II Vignettes Ethics Standards Private Wealth MCQs Test 2

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

Practice Quiz 2 for "Private Wealth" (Ethics Standards). Total 30 MCQs available, split into 3 quizzes. Test your understanding of core concepts. Mastering these concepts is essential for securing a high percentile in CFA.

General10 MCQs

1. Vignette 3: Sterling Family Office - Patricia Sterling, CFA, manages a multi-generational family office. The firm has a policy of investing all client assets in its proprietary funds, which charge 2% management fees compared to 1% for similar external funds. Has Sterling violated the Standards?

A. Acceptable because clients were informed of the policyB. Acceptable because the proprietary funds have performed wellC. Unacceptable only if the proprietary funds underperform their benchmarksD. Unacceptable because it violates Standard III(A) by placing firm revenue ahead of client benefit

2. Sterling refers clients to an estate planning attorney and receives a 15% referral fee. Sterling does not disclose this fee to her clients. Which Standard has Sterling violated?

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

3. Sterling recommends a private equity investment with a 7-year lock-up to a client who will need liquidity in 2 years to fund a business expansion. Which Standard has Sterling violated?

A. Standard III(A) - Loyalty, Prudence, and CareB. Standard III(C) - SuitabilityC. Standard III(D) - Performance PresentationD. Standard V(A) - Diligence and Reasonable Basis

4. Sterling shares a client's trust documents and family tree with a new investment consultant without obtaining the client's permission. Which Standard has Sterling violated?

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. Sterling tells a prospective client, "Our proprietary investment strategy has been proven to outperform the market in all market conditions." She has no empirical evidence to support this claim. Which Standard has Sterling violated?

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

General10 MCQs

6. Vignette 4: Crown Private Wealth - Carlos Rodriguez, CFA, manages private wealth portfolios. He receives a buy recommendation for a stock. He purchases the stock for his personal account at 9:30 AM and then executes client buy orders at 10:00 AM. Has Rodriguez violated the Standards?

A. No, because the trades were executed on different daysB. Yes, because he violated Standard III(A) by placing personal trades ahead of client tradesC. Yes, but only if the stock price increased after his personal purchaseD. No, because he is also a client of the firm

7. Rodriguez placed his personal trade ahead of a client trade for the same security. Which Standard has Rodriguez most likely violated?

A. Standard III(A) - Loyalty, Prudence, and CareB. Standard III(C) - SuitabilityC. Standard VI(B) - Priority of TransactionsD. Standard I(B) - Independence and Objectivity

8. Rodriguez uses the firm's client database and email system to market his personal real estate investment advisory business to clients during work hours. Which Standard has Rodriguez violated?

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

9. Rodriguez recommends a hedge fund to clients based solely on the fund's marketing materials, without reviewing the fund's audited financial statements or conducting independent due diligence. Which Standard has Rodriguez violated?

A. Standard III(C) - SuitabilityB. Standard I(C) - MisrepresentationC. Standard VI(A) - Disclosure of ConflictsD. Standard V(A) - Diligence and Reasonable Basis

10. Rodriguez presents a composite performance for his private wealth clients that includes only accounts with the highest returns and excludes accounts that underperformed. Which Standard has Rodriguez 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

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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 2

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