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Chartered Financial Analyst Level 1

Chartered Financial Analyst Level 1

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A member uses the firm's composite performance to present results to a prospective client, stating, "Our composite has outperformed the benchmark over the past five years, gross of fees." Is the member most likely in violation of the CFA Institute Standards?

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Explanation:

The member has not violated any CFA Institute Standards. Standard I(C), Misrepresentation, prohibits guaranteeing specific returns on volatile investments, which the member did not do. Standard III(D), Performance Presentation, requires fair and complete performance information, and the member's statement about past performance (gross of fees) is factual and does not imply future returns. Therefore, the member is not in violation of either Standard.

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