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Basic Question 6 of 15
Which one of the following least accurately describes CFA Institute's Standard relating to using material nonpublic information?
B. An analyst may violate this standard by passing information to others even when it has been obtained from outside the company.
C. An analyst may use material nonpublic information if it has been developed from a combination of nonmaterial items of information.
D. An analyst may use material nonpublic information secured from sources which have neither breached their duty nor misappropriated the information.
A. An analyst using material nonpublic information may be fined by CFA Institute.
B. An analyst may violate this standard by passing information to others even when it has been obtained from outside the company.
C. An analyst may use material nonpublic information if it has been developed from a combination of nonmaterial items of information.
D. An analyst may use material nonpublic information secured from sources which have neither breached their duty nor misappropriated the information.
User Contributed Comments 14
| User | Comment |
|---|---|
| Nancie | D is not accurate, either. What if the material nonpublic info involves tender offer or is obtained in confidence? |
| 0is4eva | It says "least accurate". "Which one of the following is the least accurate...". An analyst being fined by CFA Institute is the least accurate option about MATERIAL NONPUBLIC INFORMATION. I can't find any references to fines by the CFA Institute...? |
| OzzyPhilly | Besides if it involves a tender offer or is obtained in confidence then D would not apply because the sources would have breached their fiduciary duty to keep such information confident and/or to publicize it fairly |
| dlo1 | An example of D would be if another "lead" analyst had arrived at significant conclusions in a report from material public information and a 'mosaic' of information. The conclusions of this report would be material nonpublic information if it was directly communicated from the company. If the analyst subscribed to this report, then there is no breach of duty or misappropriation. |
| surob | I think dlo1 made an excellent point. |
| MattyBo | Agree with 0is4eva. Key to question is "least accurate". No specific references to "fines" in Standard - just process for disciplinary action. |
| dblueroom | ditto dlo1 |
| hyperinflation | I guess it was easy for me b/c I read A and knew that it was the right choice. Had I read each possible answer, I would have been really confused. |
| gill15 | Dlo...if it was subscribed to in a newsletter it would no longer be non-public information. Think D just means if you use this information alongside public information its good to go. |
| johntan1979 | D is a perfect example of mosaic theory... no violation there. |
| Shaan23 | I did another similar type question in schweser....you cannot trade on material non public material even if it was received with no breach of duty... I guess you can use the information but you cant trade on it...confusing.. |
| Shaan23 | Changed my mind. D is also wrong but it asks for least accurate. D could have exceptions as A can not and is always wrong. |
| raffrobb | Got it on my first try! |
| shalie | I think B is mosaic theory |
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity
recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct
identify conduct that conforms to the Code and Standards and conduct that violates the Code and Standards
CFA® 2025 Level I Curriculum, Volume 6, Module 3.