Answer: loyalty, prudence, and care.

## Explanation This question tests knowledge of CFA Institute's Standards of Professional Conduct, specifically Standard III(A): Loyalty, Prudence, and Care. **Key Points:** 1. **Standard III(A): Loyalty, Prudence, and Care** requires members and candidates to: - Act for the benefit of their clients - Place clients' interests before their own or their employer's interests - Exercise reasonable care and prudent judgment 2. **The violation in this scenario:** - Paying higher brokerage commissions than necessary without any corresponding benefit to the client - This represents a failure to exercise prudent judgment and care with client assets - It may also indicate a conflict of interest (e.g., receiving kickbacks or soft dollars from the broker) 3. **Why not the other options:** - **Suitability (Standard III(C))**: Deals with making suitable investment recommendations based on client's objectives and constraints. This is not about commission payments. - **Fair Dealing (Standard III(B))**: Deals with treating all clients fairly when disseminating investment recommendations or making investment actions. This is about allocation of investment opportunities, not commission costs. 4. **The core issue:** The member is not exercising prudent judgment in controlling client costs. Higher commissions reduce client returns without providing any benefit, which violates the duty of loyalty, prudence, and care to act in the client's best interest. **Correct Answer: C (loyalty, prudence, and care)**

Author: LeetQuiz .