Ethical Use of Nonpublic Information in Investment Decisions

Very Easy Cfa Institute Code And Standards Integrity - Nonpublic Info

As an investment advisor, you receive a call from a friend who is interested in buying shares of a private company that is about to go public. During your conversation, your friend shares some nonpublic information about the company that is not yet disclosed to the market. You are considering whether to act on this information as part of your investment strategy.

According to the CFA Institute Code of Ethics and Standards of Professional Conduct, which of the following actions is most appropriate?

You should invest in the company based on this nonpublic information.

You should ignore the nonpublic information and follow your usual investment guidelines.

You should disclose the nonpublic information to your firm before making any investment decisions.

Hint

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