Chartered Investment Manager (CIM) Practice Exam · Question
An investment advisor's foremost duty to a client is to act in their best interest, placing the client's interests ahead of their own. This principle is best described as:
Fiduciary duty legally obligates an advisor to act solely in the best interest of their client, prioritizing the client's needs above all else.
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Question: An investment advisor's foremost duty to a client is to act in their best interest, placing the client's interests ahead of their own. This principle is best described as:
Answer options:
- Liquidity preference. ✅ Fiduciary duty.
- Market efficiency.
- Diversification principle.
Correct answer: Fiduciary duty.
Explanation: Fiduciary duty legally obligates an advisor to act solely in the best interest of their client, prioritizing the client's needs above all else.
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