CFA Level I Complete Review Guide 2026–2027

4. I(B): assess benefits offered or received for their effect on independent judgment, including commercial pressure.
5. I(C): communicate credentials, research ownership and investment characteristics accurately; material omissions can mislead.
6. I(D): dishonest professional records and deceptive conduct undermine integrity even when a trade later earns a profit.
7. I(E): skills must match current responsibilities. A new mandate may require training, assistance or limits on the work accepted.
8. II(A): do not trade or tip others using important information that has not been publicly disseminated.
9. Mosaic analysis can combine public information and individually immaterial observations; a valuable conclusion alone does not make its inputs prohibited.
10. II(B): fabricated rumors and artificial orders intended to mislead differ from genuine trades that happen to move prices.
11. III(A): identify the ultimate client, put client welfare first and assess brokerage and voting decisions from that perspective.
12. III(B): distribute recommendations and allocate scarce opportunities fairly; transparent service tiers need not provide identical meetings.
13. III(C): understand objectives, experience and constraints, update them as circumstances change, and evaluate holdings together.
14. A portfolio managed to a defined mandate must remain within its stated investment restrictions, even when an outside opportunity looks attractive.
15. III(D): performance must be understandable and not selectively favorable; distinguish actual results from hypothetical illustrations.
16. III(E): protect prospective, current and former client information. Consider authorization, legal requirements and the stated exceptions carefully.
17. IV(A): protect employer confidential materials while employed and on departure. General experience differs from taking proprietary records.
18. Preparation for a new business can differ from active solicitation or misuse of employer resources. Client protection may justify reporting misconduct.
19. IV(B): obtain required written consents before accepting extra compensation that competes with employment interests.
20. IV(C): create reasonable controls, train and monitor staff, investigate warnings and keep oversight when delegating.
21. V(A): research must provide a defensible basis. Assess external research and model assumptions rather than relying only on reputation.
22. V(B): explain the service, client costs, investment process and material limitations; communicate significant changes promptly.
23. Label estimates as estimates. Communication duties apply to online posts and short messages as well as lengthy reports.
24. V(C): retain support for recommendations in all media and follow applicable retention law; departure does not authorize taking employer files.
25. VI(A): avoid conflicts when reasonably possible; otherwise explain the relevant conflict clearly and prominently, and keep disclosure current.
26. VI(B): personal beneficial interests must not receive improper trading priority; family accounts require careful classification and fair treatment.
27. VI(C): disclose relevant referral incentives, including noncash benefits and amounts paid as well as received.
28. VII(A): protect exam integrity. Private groups and unpaid sharing do not authorize revealing questions or specific coverage.
29. VII(B): describe program progress accurately; passing one level does not award a partial charter or guarantee superior returns.
30. Professional Conduct proceedings may investigate members or candidates, close an inquiry without sanction or refer contested matters to a review panel.

Common mistakes in this chapter

• ✕ A profitable result does not prove an ethical process, and a loss does not by itself prove inadequate diligence.
• ✕ Fair dealing need not mean identical services or identical trades for different clients.
• ✕ Publicly available conflict information is not automatically effective client disclosure.
• ✕ Passing an examination does not demonstrate competence for every professional assignment.
• ✕ Avoid conflicts when reasonably possible. Disclosure does not make prohibited conduct permissible or replace missing professional competence.