Answer: Place appropriate limitations on the wrongdoer pending the outcome of the investigation

## Explanation According to the CFA Institute's Code of Ethics and Standards of Professional Conduct, specifically Standard IV(C): Responsibilities of Supervisors, when a supervisor discovers a violation or wrongdoing by an employee, they should: 1. **Take immediate action** to limit the potential harm 2. **Place appropriate limitations** on the wrongdoer's activities pending the outcome of an investigation 3. **Increase supervision** of the employee during the investigation period Let's analyze each option: **Option A: Avoid increasing supervision of the wrongdoer until the investigation is concluded** - This is **incorrect**. Supervisors should actually increase supervision during the investigation to prevent further violations. **Option B: Place appropriate limitations on the wrongdoer pending the outcome of the investigation** - This is **correct**. This is a key requirement under Standard IV(C) to prevent further harm while the investigation is ongoing. **Option C: Rely on an employee's statement about the extent of a violation of the law if the employee gives written assurance that the wrongdoing will not reoccur** - This is **incorrect**. Supervisors cannot simply rely on an employee's assurances; they must conduct a proper investigation and take appropriate action regardless of the employee's promises. The correct approach involves a combination of limiting the employee's activities, increasing supervision, and conducting a thorough investigation to determine the appropriate disciplinary action.

Author: LeetQuiz .