Encompasses a set of moral principles and rules of conduct that provide guidance for our behavior

The word ethics comes from the Latin word "ethos" which means character

Assumptions or thoughts we hold to be true

Defined as a belief or fundamental truth that serves as the foundation for a system of belief or behavior or a chain of reasoning

One strategy to increase trust in the investment industry is to decrease the ability and motivation of market participants

A behavior that follows moral principles and balances self-interest with both the direct and the indirect consequences of the behavior on others

Below are example of situational influences, EXCEPT:

Trust is important to all business, yet it is not especially important in the investment industry for several reasons

Beliefs about obligatory and forbidden conduct in a written set of principles

It guides people toward ethical behavior

Differences in laws may reflect differences in beliefs and values

Serves as a guide for how community members should act

Serves as a benchmark for the minimally acceptable behavior of community members and can help clarify the code of ethics

The standards of Professional Conduct outline minimally acceptable behaviors expected of all CFA institute members and candidates

They are based on the shared principles of honesty, integrity, transparency, diligence, and placing client interests first

In any given profession, the code of ethics communicates the shared principles and expected behavior of its members

The relationship between client and professional is based more on transactions

Designed to foster and reinforce a culture of responsibility and professionalism

External factors that shape our thinking, decision making, and behavior.

Often codify ethical actions that lead to better outcomes for society or specific group of stakeholders

Compliance with the rule reduces the risk that clients will invest in securities without understanding the risks involve

One strategy to increase trust in the investment industry is to maximize the likelihood of unethical actions

Provides investment professionals with a tool to help them adhere to a code of ethics

The second phase in the ethical decision-making framework is the consideration of the situational influences as well as the personal behavioral biases

Examines the role of consequences and personal character in defining what is considered good or ethical conduct

The ultimate evolution of an occupation, resulting from the efforts of members practicing the occupation at a high level

The law that governs the member's or candidate's conduct

Members and candidates must use reasonable care and judgement, and should not offer solicit or accept any gift, compensation and consideration

Members and candidate must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants

In providing members with guidance for decision making, a code of ethics may generate confidence to members even those individuals who are not members of the profession

It is often narrowly defined. It applies only to specific group of individuals in specific circumstances

a job or occupation to which someone is particularly well suited and is very dedicated

It applies to all candidates and members at all times regardless of title, position, occupation, geographic location, or specific situation.

A strong belief in the reliability of a person or institution

Choose two several challenges that can make adherence to ethical conduct difficult

These are external factors, such as environmental or cultural elements, that shape our thinking, decision making, and behavior

Large financial rewards can motivate individuals to act in their own short-term self-interest

Situational influences shift our brain's focus from the short term to the long or immediate term

Who would benefit when capital flows to borrowers that can create the most value from the capital through their products and services

The law is not always the best mechanism to reduce unethical behavior

___ are subject to interpretation and compliance by the market participants

It goes beyond what is legally required and encompasses what different societal group or communities consider to be ethically correct behavior

The ability to make considered decisions and reach sensible conclusions

The following are the widely acknowledge fundamental ethical principles, EXCEPT:

High ethical standards are critical to maintaining the public’s trust in financial markets and in the investment profession

Compliance with regulation alone is enough to fully earn investor trust

It can overpower the best of intentions