Explanation

Under the CFA Institute's Standard I(A): Knowledge of the Law, members are not required to acquire detailed knowledge of all laws relating to their activities (Action 1). Instead, they must:

1. Understand and comply with applicable laws, rules, and regulations - but not necessarily have detailed knowledge of all laws
2. Dissociate from any illegal or unethical activity (Action 2)
3. Make reasonable efforts to determine the applicable laws and regulations
4. Seek legal advice when uncertain

Key points:

• Action 1 is incorrect: The standard does not require "detailed knowledge of all the laws" - this would be impractical. Members must understand and comply with applicable laws, but they can seek legal advice when needed.
• Action 2 is correct: Members must dissociate from activities they believe are unethical or illegal. This includes reporting violations to appropriate authorities when required.

Correct answer: B (Action 2 only)

Additional context:

• The standard emphasizes understanding the spirit and intent of laws, not just memorizing them
• Members should establish compliance procedures and maintain records
• When in doubt, members should consult their compliance department or legal counsel