Maria's Ethical Dilemma with Nonpublic Information

Medium Cfa Institute Code And Standards Integrity - Nonpublic Info

Maria is a portfolio manager at a large investment firm. She has recently learned about a potential merger between two companies through a private conversation with a friend who works at one of those companies. Although Maria is excited about the possibility of significant price movements due to the news, she decides to act on this nonpublic information by buying shares of the targeted company before the announcement is made.

What should Maria consider regarding her actions in light of the CFA Institute Code of Ethics and Standards of Professional Conduct?

Maria can make the trade since she is not directly involved with either company.

Maria should refrain from trading until the information is public to maintain ethical standards.

Maria can trade lightly but must disclose her intent to her firm since it's a rumor.

Hint

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% Correct69%