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2019
CFA PROGRAM
®

CURRICULUM
LEVEL I
VOLUMES 1-6
Contents v

Quantitative Methods

Study Session 2 Quantitative Methods (1)   301

Reading 6 The Time Value of Money   303

Introduction   303
Interest Rates: Interpretation   304
The Future Value of a Single Cash Flow   306
The Frequency of Compounding   310
Continuous Compounding   312
Stated and Effective Rates   313
The Future Value of a Series of Cash Flows   314
Equal Cash Flows—Ordinary Annuity   315
Unequal Cash Flows   316
The Present Value of a Single Cash Flow   317
Finding the Present Value of a Single Cash Flow   317
The Frequency of Compounding   319
The Present Value of a Series of Cash Flows   320
The Present Value of a Series of Equal Cash Flows   320
The Present Value of an Infinite Series of Equal Cash Flows—
Perpetuity   325
Present Values Indexed at Times Other than t = 0   326
The Present Value of a Series of Unequal Cash Flows   328
Solving for Rates, Number of Periods, or Size of Annuity Payments   328
Solving for Interest Rates and Growth Rates   329
Solving for the Number of Periods   331
Solving for the Size of Annuity Payments   332
Review of Present and Future Value Equivalence   336
The Cash Flow Additivity Principle   338
Summary   339
Practice Problems   340
Solutions   345

Reading 7 Discounted Cash Flow Applications   359

Introduction   359
Net Present Value and Internal Rate of Return   360
Net Present Value and the Net Present Value Rule   360
The Internal Rate of Return and the Internal Rate of Return Rule   362
Problems with the IRR Rule   365
Portfolio Return Measurement   367
Money-­Weighted Rate of Return   368
Time-­Weighted Rate of Return   369
Money Market Yields   374
Summary   379
Practice Problems   381
Solutions   384

indicates an optional segment

vi Contents

Reading 8 Statistical Concepts and Market Returns   387

Introduction   388
Some Fundamental Concepts   388
The Nature of Statistics   389
Populations and Samples   389
Measurement Scales   390
Summarizing Data Using Frequency Distributions   391
The Graphic Presentation of Data   399
The Histogram   400
The Frequency Polygon and the Cumulative Frequency Distribution   401
Measures of Central Tendency   404
The Arithmetic Mean   404
The Median   408
The Mode   411
Other Concepts of Mean   411
Other Measures of Location: Quantiles   421
Quartiles, Quintiles, Deciles, and Percentiles   421
Quantiles in Investment Practice   425
Measures of Dispersion   427
The Range   428
The Mean Absolute Deviation   428
Population Variance and Population Standard Deviation   430
Sample Variance and Sample Standard Deviation   433
Semivariance, Semideviation, and Related Concepts   437
Chebyshev’s Inequality   438
Coefficient of Variation   440
The Sharpe Ratio   442
Symmetry and Skewness in Return Distributions   445
Kurtosis in Return Distributions   451
Using Geometric and Arithmetic Means   455
Summary   457
Practice Problems   460
Solutions   467

Reading 9 Probability Concepts   471

Introduction   472
Probability, Expected Value, and Variance   472
Portfolio Expected Return and Variance of Return   494
Topics in Probability   502
Bayes’ Formula   502
Principles of Counting   506
Summary   510
Practice Problems   513
Solutions   517

indicates an optional segment

Contents vii

Study Session 3 Quantitative Methods (2)   521

Reading 10 Common Probability Distributions   523

Introduction to Common Probability Distributions   524
Discrete Random Variables   525
The Discrete Uniform Distribution   526
The Binomial Distribution   528
Continuous Random Variables   537
Continuous Uniform Distribution   538
The Normal Distribution   541
Applications of the Normal Distribution   547
The Lognormal Distribution   549
Monte Carlo Simulation   555
Summary   561
Practice Problems   564
Solutions   571

Reading 11 Sampling and Estimation   579

Introduction   580
Sampling   580
Simple Random Sampling   580
Stratified Random Sampling   582
Time-­Series and Cross-­Sectional Data   583
Distribution of the Sample Mean   586
The Central Limit Theorem   586
Point and Interval Estimates of the Population Mean   589
Point Estimators   589
Confidence Intervals for the Population Mean   591
Selection of Sample Size   597
More on Sampling   599
Data-­Mining Bias   599
Sample Selection Bias   602
Look-­Ahead Bias   603
Time-­ Period Bias   603
Summary   605
Practice Problems   608
Solutions   613

Reading 12 Hypothesis Testing   619

Introduction   620
Hypothesis Testing   621
Hypothesis Tests Concerning the Mean   630
Tests Concerning a Single Mean   630
Tests Concerning Differences between Means   638
Tests Concerning Mean Differences   642
Hypothesis Tests Concerning Variance   646
Tests Concerning a Single Variance   646
Tests Concerning the Equality (Inequality) of Two Variances   648

indicates an optional segment

viii Contents

Other Issues: Nonparametric Inference   652

Tests Concerning Correlation: The Spearman Rank Correlation
Coefficient   653
Nonparametric Inference: Summary   656
Summary   656
Practice Problems   660
Solutions   668

Reading 13 Technical Analysis   675

Introduction   675
Technical Analysis: Definition and Scope   676
Principles and Assumptions   676
Technical and Fundamental Analysis   678
Technical Analysis Tools   680
Charts   680
Trend   689
Chart Patterns   692
Technical Indicators   703
Cycles   720
Elliott Wave Theory   721
Intermarket Analysis   724
Summary   726
Practice Problems   729
Solutions   734
Appendices   737

Glossary G-1
Index I-1

indicates an optional segment

 How to Use the CFA
Program Curriculum
Congratulations on your decision to enter the Chartered Financial Analyst (CFA®)
Program. This exciting and rewarding program of study reflects your desire to become
a serious investment professional. You are embarking on a program noted for its high
ethical standards and the breadth of knowledge, skills, and abilities (competencies)
it develops. Your commitment to the CFA Program should be educationally and
professionally rewarding.
The credential you seek is respected around the world as a mark of accomplish-
ment and dedication. Each level of the program represents a distinct achievement in
professional development. Successful completion of the program is rewarded with
membership in a prestigious global community of investment professionals. CFA
charterholders are dedicated to life-­long learning and maintaining currency with the
ever-­changing dynamics of a challenging profession. The CFA Program represents the
first step toward a career-­long commitment to professional education.
The CFA examination measures your mastery of the core knowledge and skills
required to succeed as an investment professional. These core knowledge and skills
are the basis for the Candidate Body of Knowledge (CBOK™). The CBOK consists of
four components:
■■ A broad outline that lists the major topic areas covered in the CFA Program
(www.cfainstitute.org/cbok);
■■ Topic area weights that indicate the relative exam weightings of the top-­level
topic areas (www.cfainstitute.org/level_I);
■■ Learning outcome statements (LOS) that advise candidates about the specific
knowledge, skills, and abilities they should acquire from readings covering a
topic area (LOS are provided in candidate study sessions and at the beginning
of each reading); and
■■ The CFA Program curriculum that candidates receive upon exam registration.
Therefore, the key to your success on the CFA examinations is studying and under-
standing the CBOK. The following sections provide background on the CBOK, the
organization of the curriculum, and tips for developing an effective study program.

CURRICULUM DEVELOPMENT PROCESS

The CFA Program is grounded in the practice of the investment profession. Beginning
with the Global Body of Investment Knowledge (GBIK), CFA Institute performs
a continuous practice analysis with investment professionals around the world to
determine the competencies that are relevant to the profession. Regional expert panels
and targeted surveys are conducted annually to verify and reinforce the continuous
feedback from the GBIK collaborative website. The practice analysis process ultimately
defines the CBOK. The CBOK reflects the competencies that are generally accepted
and applied by investment professionals. These competencies are used in practice in
a generalist context and are expected to be demonstrated by a recently qualified CFA
charterholder.

© 2018 CFA Institute. All rights reserved.

 How to Use the CFA Program Curriculum

The Education Advisory Committee, consisting of practicing charterholders, in

conjunction with CFA Institute staff, designs the CFA Program curriculum in order
to deliver the CBOK to candidates. The examinations, also written by charterholders,
are designed to allow you to demonstrate your mastery of the CBOK as set forth in
the CFA Program curriculum. As you structure your personal study program, you
should emphasize mastery of the CBOK and the practical application of that knowl-
edge. For more information on the practice analysis, CBOK, and development of the
CFA Program curriculum, please visit www.cfainstitute.org.

ORGANIZATION OF THE CURRICULUM

The Level I CFA Program curriculum is organized into 10 topic areas. Each topic area
begins with a brief statement of the material and the depth of knowledge expected.
Each topic area is then divided into one or more study sessions. These study
sessions—19 sessions in the Level I curriculum—should form the basic structure of
your reading and preparation.
Each study session includes a statement of its structure and objective and is further
divided into specific reading assignments. An outline illustrating the organization of
these 19 study sessions can be found at the front of each volume of the curriculum.
These readings are drawn from content commissioned by CFA Institute, textbook
chapters, professional journal articles, research analyst reports, and cases. Each read-
ing includes LOS and the core material to be studied, often a combination of text,
exhibits, and in-­text examples and questions. A reading typically ends with practice
problems followed by solutions to these problems to help you understand and master
the topic areas. The LOS indicate what you should be able to accomplish after studying
the material. The LOS, the core material, and the practice problems are dependent
on each other, with the core material and practice problems providing context for
understanding the scope of the LOS and enabling you to apply a principle or concept
in a variety of scenarios.
The entire readings, including the practice problems at the end of the readings, are
the basis for all examination questions and are selected or developed specifically to
teach the knowledge and skills reflected in the CBOK.
You should use the LOS to guide and focus your study because each examination
question is based on one or more LOS and the core material and practice problems
associated with the LOS. As a candidate, you are responsible for the entirety of the
required material in a study session.
We encourage you to review the information about the LOS on our website (www.
cfainstitute.org/programs/cfaprogram/courseofstudy/Pages/study_sessions.aspx),
including the descriptions of LOS “command words” (www.cfainstitute.org/programs/
Documents/cfa_and_cipm_los_command_words.pdf ).

FEATURES OF THE CURRICULUM

OPTIONAL Required vs. Optional Segments You should read all of an assigned reading. In some
SEGMENT
cases, though, we have reprinted an entire chapter or article and marked certain parts of
the reading as “optional.” The CFA examination is based only on the required segments,
and the optional segments are included only when it is determined that they might help
you to better understand the required segments (by seeing the required material in
its full context). When an optional segment begins, you will see an icon and a dashed
How to Use the CFA Program Curriculum

vertical bar in the outside margin that will continue until the optional segment ends,
accompanied by another icon. Unless the material is specifically marked as optional,
you should assume it is required. You should rely on the required segments and the END OPTIONAL
SEGMENT
reading-­specific LOS in preparing for the examination.

Practice Problems/Solutions All practice problems at the end of the readings as well
as their solutions are part of the curriculum and are required material for the exam. In
addition to the in-­text examples and questions, these practice problems should help
demonstrate practical applications and reinforce your understanding of the concepts
presented. Many of these practice problems are adapted from past CFA examinations
and/or may serve as a basis for exam questions.

Glossary and Index For your convenience, we have printed a comprehensive glossary
in each volume. Throughout the curriculum, a bolded word in a reading denotes a
term defined in the glossary. The curriculum eBook is searchable, but we also publish
an index that can be found on the CFA Institute website with the Level I study sessions.

LOS Self-­Check We have inserted checkboxes next to each LOS that you can use to
track your progress in mastering the concepts in each reading.

Source Material The authorship, publisher, and copyright owners are given for each
reading for your reference. We recommend that you use the CFA Institute curricu-
lum rather than the original source materials because the curriculum may include
only selected pages from outside readings, updated sections within the readings, and
problems and solutions tailored to the CFA Program. Note that some readings may
contain a web address or URL. The referenced sites were live at the time the reading
was written but may have been deactivated since then.

Some readings in the curriculum cite articles published in the Financial Analysts Journal®,
which is the flagship publication of CFA Institute. Since its launch in 1945, the Financial
Analysts Journal has established itself as the leading practitioner-­oriented journal in the
investment management community. Over the years, it has advanced the knowledge and
understanding of the practice of investment management through the publication of
peer-­reviewed practitioner-­relevant research from leading academics and practitioners.
It has also featured thought-­provoking opinion pieces that advance the common level
of discourse within the investment management profession. Some of the most influen-
tial research in the area of investment management has appeared in the pages of the
Financial Analysts Journal, and 12 Nobel laureates have contributed more than 40 articles.
Candidates are not responsible for familiarity with Financial Analysts Journal articles
that are cited in the curriculum. But, as your time and studies allow, we strongly encour-
age you to begin supplementing your understanding of key investment management
issues by reading this practice-­oriented publication. Candidates have full online access
to the Financial Analysts Journal and associated resources. All you need is to log in on
www.cfapubs.org using your candidate credentials.

DESIGNING YOUR PERSONAL STUDY PROGRAM

Create a Schedule An orderly, systematic approach to exam preparation is critical.

You should dedicate a consistent block of time every week to reading and studying.
Complete all reading assignments and the associated problems and solutions in each
 How to Use the CFA Program Curriculum

study session. Review the LOS both before and after you study each reading to ensure
that you have mastered the applicable content and can demonstrate the knowledge and
skills described by the LOS and the assigned reading. Use the LOS self-­check to track
your progress and highlight areas of weakness for later review.
As you prepare for your exam, we will e-­mail you important exam updates, test-
ing policies, and study tips. Be sure to read these carefully. Curriculum errata are
periodically updated and posted on the study session page at www.cfainstitute.org.
Successful candidates report an average of more than 300 hours preparing for each
exam. Your preparation time will vary based on your prior education and experience,
and you will probably spend more time on some study sessions than on others. As
the Level I curriculum includes 19 study sessions, a good plan is to devote 15−20
hours per week for 19 weeks to studying the material and use the final four to six
weeks before the exam to review what you have learned and practice with practice
questions and mock exams. This recommendation, however, may underestimate the
hours needed for appropriate examination preparation depending on your individual
circumstances, relevant experience, and academic background. You will undoubtedly
adjust your study time to conform to your own strengths and weaknesses and to your
educational and professional background.
You should allow ample time for both in-­depth study of all topic areas and addi-
tional concentration on those topic areas for which you feel the least prepared.
An interactive study planner is provided along with your practice questions and
mock exams to help you plan your study time. The interactive study planner calculates
your study progress and pace based on the time remaining until examination.

CFA Institute Practice Questions The CFA Institute practice question sets are intended
to assess your mastery of individual topic areas as you progress through your studies.
After each practice question set, you will receive immediate feedback noting the cor-
rect responses and indicating the relevant assigned reading so you can identify areas
of weakness for further study. For more information on the practice question sets,
please visit www.cfainstitute.org.

CFA Institute Mock Exams The three-­hour mock exams simulate the morning and
afternoon sessions of the actual CFA examination, and are intended to be taken after
you complete your study of the full curriculum so you can test your understanding of
the curriculum and your readiness for the exam. You will receive feedback at the end
of the mock exam, noting the correct responses and indicating the relevant assigned
readings so you can assess areas of weakness for further study during your review period.
We recommend that you take mock exams during the final stages of your preparation
for the actual CFA examination. For more information on the mock examinations,
please visit www.cfainstitute.org.

Preparatory Providers After you enroll in the CFA Program, you may receive numer-
ous solicitations for preparatory courses and review materials. When considering a
prep course, make sure the provider is in compliance with the CFA Institute Approved
Prep Provider Program (www.cfainstitute.org/utility/examprep/Pages/index.aspx).
Just remember, there are no shortcuts to success on the CFA examinations; reading
and studying the CFA curriculum is the key to success on the examination. The CFA
examinations reference only the CFA Institute assigned curriculum—no preparatory
course or review course materials are consulted or referenced.
How to Use the CFA Program Curriculum

SUMMARY
Every question on the CFA examination is based on the content contained in the required
readings and on one or more LOS. Frequently, an examination question is based on a
specific example highlighted within a reading or on a specific practice problem and its
solution. To make effective use of the CFA Program curriculum, please remember these
key points:
1 All pages of the curriculum are required reading for the examination except for
occasional sections marked as optional. You may read optional pages as back-
ground, but you will not be tested on them.
2 All questions, problems, and their solutions—found at the end of readings—are
part of the curriculum and are required study material for the examination.
3 You should make appropriate use of the topic tests and mock examinations and
other resources available at www.cfainstitute.org.
4 Use the interactive study planner to create a schedule and commit sufficient study
time to cover the 18 study sessions, review the materials, and take topic tests and
mock examinations.
5 Some of the concepts in the study sessions may be superseded by updated
rulings and/or pronouncements issued after a reading was published. Candidates
are expected to be familiar with the overall analytical framework contained in the
assigned readings. Candidates are not responsible for changes that occur after the
material was written.

FEEDBACK
At CFA Institute, we are committed to delivering a comprehensive and rigorous curric-
ulum for the development of competent, ethically grounded investment professionals.
We rely on candidate and member feedback as we work to incorporate content, design,
and packaging improvements. You can be assured that we will continue to listen to your
suggestions. Please send any comments or feedback to [email protected]. Ongoing
improvements in the curriculum will help you prepare for success on the upcoming
examinations and for a lifetime of learning as a serious investment professional.
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 Ethical and Professional
Standards

STUDY SESSION

Study Session 1 Ethical and Professional Standards

TOPIC LEVEL LEARNING OUTCOME

The candidate should be able to explain the need for high ethical standards in the
investment industry and the ethical responsibilities required by the CFA Institute
Code of Ethics and Standards of Professional Conduct and to demonstrate the appli-
cation of the Code and Standards. The candidate should also be able to demonstrate
an understanding of the Global Investment Performance Standards.
Trust in the investment profession is achieved only if those practicing within the
industry adhere to the highest levels of ethical conduct and behavior. The CFA Institute
Code of Ethics and Standards of Professional Conduct (Code and Standards) serve as
the ethical foundation for the CFA Institute self-­regulatory program.
The Standards of Practice Handbook provides practical application of the Code
and Standards by explaining the purpose and scope of each standard, presenting rec-
ommended procedures for compliance, and providing examples of each standard in
practice.
The Global Investment Performance Standards (GIPS®) establish global standards
for performance reporting by investment managers. By providing a consistent set of
standards and methodology, GIPS facilitate the fair and accurate comparison of man-
agers around the world, while minimizing the potential for ambiguous or misleading
performance reporting practices.

© 2018 CFA Institute. All rights reserved.

 E t h ical an d P r ofessional S tan d a r d s

1
STUDY SESSION

Ethical and Professional

Standards

This study session introduces ethics, related challenges to ethical behavior, and the
role played by ethics in the investment profession. A framework to support ethical
decision-­making is provided to help guide behavior. The CFA Institute Code of
Ethics and Standards of Professional Conduct (Code and Standards) are examined,
with attention given to each standard and its application. The session concludes with
coverage of the Global Investment Performance Standards.

READING ASSIGNMENTS

Reading 1 Ethics and Trust in the Investment Profession

by Bidhan L. Parmar, PhD, Dorothy C. Kelly, CFA, and
David B. Stevens, CIMC, CFA
Reading 2 Code of Ethics and Standards of Professional Conduct
Standards of Practice Handbook, Eleventh Edition
Reading 3 Guidance for Standards I–VII
Standards of Practice Handbook, Eleventh Edition
Reading 4 Introduction to the Global Investment Performance
Standards (GIPS)
Reading 5 Global Investment Performance Standards (GIPS)

© 2018 CFA Institute. All rights reserved.

READING

1
Ethics and Trust in the
Investment Profession
by Bidhan L. Parmar, PhD, Dorothy C. Kelly, CFA, and
David B. Stevens, CIMC, CFA
Bidhan L. Parmar, PhD, is at the University of Virginia (USA). Dorothy C. Kelly, CFA, is at
McIntire School of Commerce, University of Virginia (USA). David B. Stevens, CIMC, CFA,
is at Wells Fargo Private Bank (USA).

LEARNING OUTCOMES
Mastery The candidate should be able to:

a. explain ethics;
b. describe the role of a code of ethics in defining a profession;
c. identify challenges to ethical behavior;
d. describe the need for high ethical standards in the investment
industry;
e. distinguish between ethical and legal standards;
f. describe and apply a framework for ethical decision making.

INTRODUCTION
As a candidate in the CFA Program, you are both expected and required to meet
1
high ethical standards. This reading introduces ideas and concepts that will help you
understand the importance of ethical behavior in the investment industry. You will
be introduced to various types of ethical issues within the investment profession and
learn about the CFA Institute Code of Ethics. Subsequently, you will be introduced
to a framework as a way to approach ethical decision making.
Imagine that you are employed in the research department of a large financial
services firm. You and your colleagues spend your days researching, analyzing, and
valuing the shares of publicly traded companies and sharing your investment recom-
mendations with clients. You love your work and take great satisfaction in knowing
that your recommendations can help the firm’s investing clients make informed invest-
ment decisions that will help them meet their financial goals and improve their lives.

© 2016 CFA Institute. All rights reserved.

6 Reading 1 ■ Ethics and Trust in the Investment Profession

Several months after starting at the firm, you learn that an analyst at the firm has
been terminated for writing and publishing research reports that misrepresented the
fundamental risks of some companies to investors. You learn that the analyst wrote
the reports with the goal of pleasing the management of the companies that were
the subjects of the research reports. He hoped that these companies would hire your
firm’s investment banking division for its services and he would be rewarded with
large bonuses for helping the firm increase its investment banking fees. Some clients
bought shares based on the analyst’s reports and suffered losses. They posted stories
on the internet about their losses and the misleading nature of the reports. When
the media investigated and published the story, the firm’s reputation for investment
research suffered. Investors began to question the firm’s motives and the objectivity of
its research recommendations. The firm’s investment clients started to look elsewhere
for investment advice, and company clients begin to transfer their business to firms
with untarnished reputations. With business declining, management is forced to trim
staff. Along with many other hard-­working colleagues, you lose your job—through
no fault of your own.
Imagine how you would feel in this situation. Most people would feel upset and
resentful that their hard and honest work was derailed by someone else’s unethical
behavior. Yet, this type of scenario is not uncommon. Around the world, unsuspecting
employees at such companies as SAC Capital, Stanford Financial Group, Everbright
Securities, Enron, Satyam Computer Services, Arthur Andersen, and other large com-
panies have experienced such career setbacks when someone else’s actions destroyed
trust in their companies and industries.
Businesses and financial markets thrive on trust—defined as a strong belief in
the reliability of a person or institution. In a 2013 study on trust, investors indicated
that to earn their trust, the top three attributes of an investment manager should be
that it (1) has transparent and open business practices, (2) takes responsible actions
to address an issue or crisis, and (3) has ethical business practices.1 Although these
attributes are valued by customers and clients in any industry, this reading will explore
why they are of particular importance to the investment industry.
People may think that ethical behavior is simply about following laws, regulations,
and other rules, but throughout our lives and careers we will encounter situations in
which there is no definitive rule that specifies how to act, or the rules that exist may be
unclear or even in conflict with each other. Responsible people, including investment
professionals, must be willing and able to identify potential ethical issues and create
solutions to them even in the absence of clearly stated rules.

2 ETHICS
Through our individual actions, each of us can affect the lives of others. Our decisions
and behavior can harm or benefit a variety of stakeholders—individuals or groups
of individuals who could be affected either directly or indirectly by a decision and
thus have an interest, or stake, in the decision. Examples of stakeholders in decisions
made by investment industry professionals include our colleagues, our clients, our
employers, the communities in which we live and work, the investment profession,
and other financial market participants. In some cases, our actions may benefit all of
these stakeholder groups; in other cases, our actions may benefit only some stakeholder
groups; and in still other cases, our actions may benefit some stakeholder groups and

1 CFA Institute and Edelman, “Investor Trust Study” (2013): http://www.cfapubs.org/doi/pdf/10.2469/

ccb.v2013.n14.1.
Ethics 7

harm others. For example, recall the research analyst in the introduction who wrote
misleading research reports with the aim of increasing the financial benefit to him-
self and his employer. In the very short term, his conduct seemed to directly benefit
some stakeholders (certain clients, himself, and his employer) and to harm other
stakeholders (clients who invested based on his reports). Over a longer time period,
his conduct resulted in harm to himself and many other stakeholders—his employer,
his employer’s clients, his colleagues, investors, and through loss of trust when the
story was published, the larger financial market.
Ethics encompasses a set of moral principles and rules of conduct that provide
guidance for our behavior. The word “ethics” comes from the Greek word “ethos,”
meaning character, used to describe the guiding beliefs or ideals characterizing a
society or societal group. Beliefs are assumptions or thoughts we hold to be true. A
principle is defined as a belief or fundamental truth that serves as the foundation for
a system of belief or behavior or a chain of reasoning. Our beliefs form our values—
those things we deem to have worth or merit.
Moral principles or ethical principles are beliefs regarding what is good, accept-
able, or obligatory behavior and what is bad, unacceptable, or forbidden behavior.
Ethical principles may refer to beliefs regarding behavior that an individual expects of
himself or herself, as well as shared beliefs regarding standards of behavior expected
or required by a community or societal group.
Another definition of ethics is the study of moral principles, which can be described
as the study of good and bad behavior or the study of making good choices as opposed
to bad choices. The study of ethics examines the role of consequences and personal
character in defining what is considered good, or ethical, conduct.
Ethical conduct is behavior that follows moral principles and balances self-­interest
with both the direct and the indirect consequences of the behavior on others. Ethical
actions are those actions that are perceived as beneficial and conforming to the ethi-
cal expectations of society. An action may be considered beneficial if it improves the
outcomes or consequences for stakeholders affected by the action. Telling the truth
about the risks or costs associated with a recommended investment, for example, is
an ethical action—that is, one that conforms to the ethical expectations of society in
general and clients in particular. Telling the truth is also beneficial; telling the truth
builds trust with customers and clients and enables them to make more informed
decisions, which should lead to better outcomes for them and higher levels of client/
customer satisfaction for you and your employer.
Widely acknowledged ethical principles include honesty, fairness or justice, dili-
gence, and respect for the rights of others. Most societal groups share these fundamen-
tal ethical principles and build on them, establishing a shared set of rules regarding
how members should behave in certain situations. The principles or rules may take
different forms depending on the community establishing them.
Governments and related entities, for example, may establish laws and/or regula-
tions to reflect widely shared beliefs about obligatory and forbidden conduct. Laws and
regulations are rules of conduct specified by a governing body, such as a legislature
or a regulator, identifying how individuals and entities under its jurisdiction should
behave in certain situations. Most countries have laws and regulations governing the
investment industry and the conduct of its participants. Differences in laws may reflect
differences in beliefs and values.
In some countries, for example, the law requires that an investment adviser act
in the best interests of his or her clients. Other countries require that investment
professionals recommend investments that are suitable for their clients. Investment
advisers and portfolio managers who are required by law to act in their clients’ best
interests must always put their clients’ interests ahead of their own or their employ-
ers’ interests. An investment adviser who is required by law to act in a client’s best
interest must understand the client’s financial objectives and risk tolerance, research
8 Reading 1 ■ Ethics and Trust in the Investment Profession

and investigate multiple investment opportunities, and recommend the investment

or investment portfolio that is most suitable for the client in terms of meeting his
or her long-­term financial objectives. In addition, the investment adviser would be
expected to monitor the client’s financial situation and investments to ensure that
the investments recommended remain the best overall option for meeting the client’s
long-­term financial objectives. In countries with only a suitability requirement, it is
legal for investment professionals to recommend a suitable investment to a client even
if other, similar suitable investments with lower fees are available. These differences
in laws reflect differences in beliefs and values.
Specific communities or societal groups in which we live and work sometimes cod-
ify their beliefs about obligatory and forbidden conduct in a written set of principles,
often called a code of ethics. Universities, employers, and professional associations
often adopt a code of ethics to communicate the organization’s values and overall
expectations regarding member behavior. The code of ethics serves as a general
guide for how community members should act. Some communities will also expand
on their codes of ethics and adopt explicit rules or standards that identify specific
behaviors required of community members. These standards of conduct serve as
benchmarks for the minimally acceptable behavior of community members and can
help clarify the code of ethics. Members can choose behaviors that demonstrate even
higher standards. By joining the community, members are agreeing to adhere to the
community’s code of ethics and standards of conduct. To promote their code of ethics
and reduce the incidence of violations, communities frequently display their codes in
prominent locations and in written materials. In addition, most communities require
that members commit to their codes in writing on an annual or more frequent basis.
Violations of a community’s established code of ethics and/or standards of con-
duct can harm the community in a variety of ways. Violations have the potential to
damage the community’s reputation among external stakeholders and the general
public. Violations can also damage the community’s reputation internally and lead to
reduced trust among community members and can cause the organization to fracture
or splinter from within. To protect the reputation of its membership and limit potential
harm to innocent members, the community may take corrective actions to investigate
possible violations, repair any damages, and attempt to discipline the violator or, in
severe cases, revoke the violator’s membership in the community.
CFA Institute is an example of a community with an established code of ethics
and standards of conduct. Its members and candidates commit to adhere to shared
beliefs about acceptable conduct for individuals participating in the investment indus-
try. These beliefs are presented in the Code of Ethics and Standards of Professional
Conduct (Code and Standards), which are included in the CFA Institute Standards of
Practice Handbook. The Code of Ethics communicates the organization’s principles,
values, and expectations. For example, the Code states that members and candidates
“place the integrity of the investment profession and the interests of clients above
their own personal interests.” The Standards of Professional Conduct outline mini-
mally acceptable behaviors expected of all CFA Institute members and candidates.
For example, one standard requires that “Members and Candidates must act for the
benefit of their clients and place their clients’ interests before their employer’s or their
own interests.” Another standard requires that “Members and Candidates must make
full and fair disclosure of all matters that could reasonably be expected to impair
their independence and objectivity or interfere with respective duties to their clients,
prospective clients, and employer. Members and Candidates must ensure that such
disclosures are prominent, are delivered in plain language, and communicate the
relevant information effectively.”
CFA Institute members and candidates re-­affirm their commitment to adhere to the
Code and Standards each year. In addition, to protect the reputation of the community,
members and candidates agree to submit a Professional Conduct Statement each year
Other documents randomly have
different content
“I don’t know. I ought to go home.”

“Help me pull this last box of stuff into the shed. There,
that’s fine. Allen, don’t burn anything more. We want to
leave as soon as possible.”

After everything was carefully stowed away, Lynne

walked to the log fence. “Let’s sit up here until Allen’s
ready.”

Judy climbed up next to Lynne.

“On Saturday,” Lynne said, “we have a beautiful, free

day, no concert, no rehearsal, no camp. For a long time
Allen and I have planned to visit Toklat. You’ve heard of
the huskies, the wonderful Alaskan dogs that live there,
trained and bred by Stuart Mace.”

Judy nodded.

“I think you’ll love seeing them. Allen’s crazy about dogs

and he’s been dying to go there ever since we came to
Aspen. And not a stone’s throw from Toklat is a real
ghost town, the kind you’ve been babbling about.
Ashcroft, once larger than Aspen, is still deserted after
seventy years.”

“You mean the silver-mining town?” Judy asked, 105

interested in spite of herself. Karl’s faithlessness receded
for the moment.

Lynne nodded. “The same. And maybe we’ll top off the
day with a ride up the Chairlift.”

“You mean—you want me to go along?”

“Of course.” Pleased at having roused Judy from her
lethargy, Lynne said, “I’m glad you like the idea. It’ll be
fun having you with us, almost like having my sister
Jane. I miss my family. I haven’t seen them in a year. So
you see how much I need you!”

Is Lynne saying that just to cheer me?

“Saturday? I’d love to go. It’s wonderful of you to ask

me.” After a pause she sighed, “How I wish Karl could
come too—”

“Well, maybe he can—but Saturday is a very busy time

at the Swiss Shop—but I can ask him.”

“He’ll probably have other things to do besides the

Swiss Shop.” Lynne looked at Judy, understanding the
girl’s troubled spirit.

“Karl or no Karl, we’re going to have a good time! Now,

what about that swim in the pool?”

“No. I’ll go home. Mother’s rehearsing this afternoon

and again tonight. She’ll be tired. I want to help with
dinner.”

As they bumped along the stony road that separated

the camp from Aspen, Judy was silent. She thought of
the sad things she would have to communicate to her
diary. Her happiness was forever gone! Her lips twisted
into what was intended to be a cynical smile. A broken
heart? As a potential writer she was critical of the
phrase. No, not broken, but damaged, certainly. Karl
had deserted her for another!

106
 10
A CATASTROPHE WITH A HAPPY ENDING

Dinner was long over. The dishes washed, only the

burned pots remained. While preparing the meal, Judy’s
thoughts had been engaged on more important matters.
Karl’s cruel neglect! She told herself, so what? It isn’t
the end of the world! But in her heart she felt it was. Mr.
Lurie, perched on the step-ladder, was putting away into
the inaccessible closets plates and platters Judy had
managed to assemble for this, her first experiment in
preparing dinner.

As she scrubbed at the stubborn stains on the

aluminum, she was thoughtful. She’d come home early,
early enough to see her mother wasn’t feeling well.
Minna had sunk into a chair, too tired, she admitted, to
move. It was at Judy’s insistence that she went to bed.
What mattered that the onions were burnt to a crisp,
that the creamed spinach had emerged like green glue?
The smiles and pleasantries of her parents were
compensation enough.

Minna had sat through the dinner, refreshed by her nap, 107
the color once more back in her cheeks. She ate little.
Occasionally she touched her throat, a gesture no one
noticed. It was only when pouring coffee that her hand
trembled so violently that the cup and saucer fell from
her hands.
“What made me do that?” she asked in a troubled
whisper.

“It means that you’re going right back to bed for

another rest before the boys come to rehearse.” And
with a great show of assumed indifference, he
persuaded her to lie down once more.

The telephone rang. Judy, struggling with steel wool

and pot, paid no heed to the insistent ring. Her father,
still perched on the ladder trying to fit a platter into a
space several inches too low for its bulk, said, “Take the
phone, Judy.”

She dried her hands on her apron and unhurriedly

reached the phone. No one ever calls me, she thought
with a touch of bitterness as she picked up the receiver.

“Hello. Who’s this? Judy?”

“Yes, it’s me, Karl,” she answered, too surprised to say

more.

“Is your father going to be home tonight? There’s

something I’d like to talk to him about.”

“Oh, Father?” An unreasoning resentment filled her. So

it was her father he wanted to see—not her! Maybe it
was always her father, or her mother—

“He’s rehearsing tonight, that is, Mother is,” she said

dully. “He’ll be kind of busy.”

There was a long, disappointed, “Oh!” at the other end

of the wire. Judy clutched at a straw. With a quick,
turnabout gayety, she said, “Other people are available.
Maybe—”
“Do you think I could come over and listen in?” Karl
asked eagerly. “Your father said I might come sometime
but we never made it definite. Then—I could see you
too.” His voice rumbled away in silence.

“Hold the wire, Karl, I’ll ask him.”

She made a wild dash to the kitchen and found her 108
father lighting his pipe after his kitchen labors. She
asked her question.

“Oh, I guess it’s all right. I did promise—”

She barely allowed him to finish and bounded back to

the parlor, knocking over a spindly chair in her
marathon.

“Father says it’s all right. Yes, eight o’clock.”

She tore back to the kitchen, picked up a dust cloth,

and began to tidy up the place. She was considering her
strategy. “I’ll ask him immediately why he didn’t take
me into his confidence. And who is this girl, this
accompanist? I won’t beat about the bush and I won’t
act as if I cared.” She gave the table an extra rub and
with a flourish of the cloth she swept some sheets of
music to the floor.

“My goodness!” her father exclaimed as he picked up

the scattered sheets. “What an eager beaver we’ve
become! Is it Aspenitis or Karlitis?” he said grinning.

Judy felt her cheeks grow hot. “Father,” she said, “if
that’s the way you appreciate my services, making
despicable jokes—”
“Oh, come now, Judy, can’t you take a bit of razzing?”
He looked at her flushed face and said with great
sweetness, “I’m glad you know Karl. I think a lot of that
boy and I don’t mean only in the music field. He has
character and a great deal of talent and with hard work,
I think his future looks bright. I’m trying to help him in a
small way.”

She looked up gratefully. “Karl said he wanted to talk to

you.” There was much more she wanted to say but she
suddenly remembered her hair, her dress.

When the doorbell rang, a spruced-up Judy greeted the

musicians and Karl. The music stands were taken from
the hall closet, the lamps moved into place, and the
men sat down busily chatting among themselves.

Judy motioned to Karl. “We can sit over here on this 109
little sofa.” An innate delicacy made her refrain from
calling it “the Victorian loveseat,” her mother’s term for
this small, uncomfortable, but charming little piece. “We
can see and hear perfectly,” she said as they seated
themselves.
“I hear you’ve entered a competition for original
compositions,” Judy said, plunging right in without
further preliminaries.

“Yes. I guess Lynne told you, although I did want to

keep it a secret,” he said somewhat sheepishly. “For one
thing, it hasn’t been accepted as yet. I wanted to
surprise you. I’m still working on it.”

“I thought it was finished.”

“No. That’s what I wanted to consult your father about.

Maybe I should leave it with just a piano
accompaniment since that’s pretty well worked out and
the accompanist plays it well.”

For one bleak moment Judy regretted she hadn’t 110

touched the piano all summer. If she had, maybe—
Aloud she said brightly, “I hear your accompanist is not
only beautiful, but plays like an angel!”

Karl looked puzzled. “I don’t know what you’re driving

at. Marie Hoeffer is a fine young lady but she’s no
Rubinstein, if that’s what you mean.”

Judy smiled her skepticism.

“She came to Aspen for a summer of music,” Karl went

on, “but I guess she’s chiefly concerned with having a
good time,” he laughed good-naturedly.

Judy knitted her brows. A serious musician one might

respect. But for someone to come to Aspen under the
cloak of music deliberately to waylay and ensnare a boy
like Karl, that was a more serious matter!

The men were tuning their instruments and in the

jangle of sounds she remained silent. But her curiosity
was sorely tried. How old was she? Where did she come
from? If from California or Maine or Alaska, all was not
lost! She would have to go back to those remote places
—

“I hear she’s quite ancient,” Judy said at last, her voice

drooling sweetness.

Before Karl could gather up his forces to reply, Mrs.

Lurie came into the room. She looked beautiful but
terribly pale.

“I’m sorry to have kept you waiting. I hope you’ll forgive

me,” she said, speaking barely above a whisper.

“You didn’t keep us waiting at all,” Mr. Lurie said. “We

had lots to discuss. But now, my dear, we’re ready, if
you are.”

Minna took up her position at the piano. Her husband

tapped his bow and the opening measures were begun.
Minna was given her cue to start. She sang a few bars,
then stopped as if displeased with the tone.

Mr. Lurie held up his bow. “We’ll start again. We play 111
five measures, Minna, then you come in.”

The opening bars were repeated. Minna came in at the

appropriate beat. She sang three bars, then another.
She opened her mouth for the next high note. There
was a hoarseness, a thickness, then nothing. Finally a
heartbroken whisper broke the strained silence.

“John, I can’t sing—I’ve lost my voice—”

In the confusion that followed, Judy only remembered

the terror in her mother’s eyes and her father’s
gentleness as he calmed her.

“Karl,” Mr. Lurie said quietly, “Dr. Keene lives down the
block. No use telephoning, his wire is usually busy at
this hour. Go quickly and tell him to come.”

The musicians left, murmuring their sympathy. Mr. Lurie

carried the inert and almost helpless Minna to her bed.
She was suffering now from a chill and Judy, without
having to be told, fetched the hot water bottle and extra
blankets.

She returned to the parlor and stared at the empty

chairs, the shining music stands, the blaze of lights. She
began pacing the tiny room. All these weeks she hadn’t
given a thought to her mother, thought only of Karl. She
murmured an inarticulate prayer—“Oh, God, don’t take
away her voice. She’ll die if she can’t sing.” Her mother’s
words spoken weeks ago beat upon Judy’s memory.
“Struggle to get this far—” Judy knew now that it took a
great deal to make an artist, hours, days, years of work.
“God,” she murmured again, putting her fist to her
mouth to keep it from trembling, “help her!”

She heard the back door open and then close. That 112
must be the doctor. The waiting was intolerable. She put
away the stands and the lamps and chairs were back in
their accustomed places. Anything to keep busy! Karl
tiptoed into the room, “The doctor is with your mother.”

Judy nodded. He made her sit down and clumsily patted

her shoulder.

At last Dr. Keene came into the room followed by Mr.

Lurie.

The doctor smiled a greeting to Judy and told John to

sit down. “I want to talk to you,” he said in his breezy
voice.

“If you don’t mind, I’d rather stand. Shall I send the
youngsters from the room?”

“No, they can stay. Perhaps Judy can be of some help

and, anyhow, it will be necessary for her to understand
her mother’s condition.”

“Yes, yes!” John said impatiently. “Go on!”

“You heard me tell Minna,” the doctor proceeded calmly,

“there is no visible damage to her throat or her vocal
cords.”

“I thought you just said that to prevent her worrying,

for psychological reasons,” John interrupted.

“Partially,” Dr. Keene nodded in agreement. “But I am

convinced also this will clear up in a matter of days. If it
shouldn’t,” he paused a moment, “then other measures
will have to be taken. But we’re going on my diagnosis
for the present until I see the necessity of changing it.”

John gave an audible sigh of relief.

“I’ve watched Minna all summer. She’s driven herself too

hard, particularly as she continues the same pace all
winter. She’s overworked and there are other
contributing causes. Luckily, she has a fine constitution,
otherwise I wouldn’t be so optimistic.”

At last John seemed calm enough to sit down. “You’re 113

right, of course. I should have seen this thing coming.
She’s taken this concert too seriously—and her teaching
and her own lessons—to say nothing of helping
students who should be on their own.” He spoke
disjointedly. “She never spares herself.” He shook his
head. “Then there’s the house, the meals, and she
worries about Judy. I should have put my foot down,”
he said reproaching himself.

“No, John. There’s nothing you or anyone can do about

a person who has this excessive drive. Without it a
great talent often peters out.”

Dr. Keene paused to light his pipe. “John, your wife

needs rest, bed rest, and she is absolutely forbidden to
use her voice, even to whisper. Whatever she requires
or wishes to communicate must be written down. With
good, light, and nourishing food, plenty of fluids, and
the complete rest of her vocal cords, she will be all
right.” He smiled reassuringly at Mr. Lurie. “She’ll sing at
the concert. I gave her my promise and I mean to keep
it.”

“Doctor, you can really promise—”

Dr. Keene nodded. “Unless something unforeseen—but I
don’t anticipate any complications. I’ve come across this
condition several times, particularly with pianists and
singers. It is aggravated by too much exposure to the
sun, later followed by a chill, exactly as was the case
with Minna.”

The doctor looked thoughtful. “I would like to suggest

you have a nurse except that I know that one is
impossible to be had. Our Pitkin County Hospital is
understaffed. Who’s going to help you, John? I know
you’ve got to teach. Classes must go on—”

“Private lessons can wait or be postponed. It’s the music

school that bothers me and—”

“Father,” Judy broke in, “you’re forgetting me. Dr. Keene

said I could help.”

“And I’ll take your place at camp,” Karl said eagerly. “It’s 114
only mornings and I can arrange it, if you wish, Judy.”

Dr. Keene got up. “That settles everything nicely. Judy,

you and your father will relieve each other. Remember
again, absolute silence on your mother’s part in her
cure. I’ve given her a sedative and I advise you and
your father to go to bed.”

Mr. Lurie accompanied Dr. Keene to the door and Judy

followed with Karl. While the two men were exchanging
some final words, Judy said, “I can’t thank you enough,
Karl, for offering to help at camp. But I’m worried, too.
You need every hour of practice.”

“Haven’t you enough on your mind without taking me

on too? I’ll manage,” he said cheerfully. “Besides, I want
to help. I’m doing very little really and Uncle Yahn won’t
mind. He admires your family so much.”

He held Judy’s limp hand. “Don’t you understand how

much your family and—you have meant to me this
summer?”

Dr. Keene motioned to Karl and said, “Come on, young

man, we’ve got to let these people get some rest.”

For four days Minna Lurie’s room was in semidarkness.

No one rang the doorbell and no one was permitted to
telephone. The music students came quietly, played
with unusual softness and left just as unobtrusively.
When Judy saw the first one arrive, she was alarmed
and hastily inquired, “Shall I send the young Paderewski
away?”

Minna wrote with a still unsteady hand, “No. Like

hearing piano.”

Preparing three meals a day might have taxed an even

older girl than Judy, but her confidence was undaunted.
No worker in a scientific laboratory studied instructions
with more meticulous care than Judy lavished over the
fine print on boxes of jell-o, cream of wheat, or custard
puddings.

The doctor smiled and told her a nurse couldn’t have 115
been more efficient. On the following day Minna was
permitted to sit in a chair for a few hours, the sun
allowed to filter into the room.

Judy stood at the window, enjoying the play of the

sunshine on the trees. She turned as she heard the
gentle tapping of the pencil. Minna held up her pad. “I
want you to go outdoors for a breath of air. Take a long
walk.”

“No, Mother. Father won’t be home for hours. I won’t

leave until he—”

“I’m staying with Mother and you’re to go out,” Lynne

said breezily as she greeted them.

Judy warningly touched her lips. Lynne nodded, “I know

the rules. I’ll do all the talking. I’ve so much to tell
Minna—Now run along. I only have an hour and a half.”

As she followed Judy into the hall to speed her on her

way, Judy asked, “How’s Karl making out at camp?”

“Not badly, but nothing sensational. He has too much on

his mind. Three days were quite enough—I can manage
for the rest of the time until you get back. Now go! To
use your own overworked phrase, ‘tempus fugit!’”

Judy stood on the porch, hesitating. Where? Her feet

led her unerringly to the practice room where she knew
Karl would be working. She smiled joyfully as she heard
his violin. She could recognize that tone no matter how
many violins were playing! Hmmm, and that must be
the accompanist, Marian. She stepped inside and sat
down unnoticed. The playing went on. At a propitious
moment of silence, she cleared her throat noisily. Karl
turned, saw her, a smile lighting up his face as he
waved his bow. The rehearsal went on. Talk—repetition
of parts—more talk. Judy sat wondering if she should
leave. Then Karl’s voice, “Hold it, Marian—”

He strode over to Judy. “It’s just wonderful to see you! I 116

know your mother’s coming along great. Your father and
Lynne told me.” He looked pensively at her, “You look
peaked—”

“I’m all right, now that I know Mother’s going to be able

to sing—How’s the piece coming along?”

“Slowly. It sounds so wonderful in my head, but when it

comes to setting it down—it takes so much time and I
feel so pressed for time—”

“I know. Sometimes I think of a story—everything

seems so right until I come to writing it down.” She
looked at him smiling, “But you have a wonderful basic
theme. It has power to move one—nothing can spoil
that. Folk tunes could be introduced, you know, the way
Dvorak did in his ‘New World Symphony.’”

He shook his head approvingly. “I can clarify things just

by talking them out with you. I miss you, Judy—so
much!”

“Me too,” the budding author sighed, throwing grammar

to the winds.

An impatient chord at the piano—

“I can’t keep Marian waiting. Tomorrow she comes at

one o’clock and leaves at three—”

Another chord and the slightly sharp voice, “Work

before pleasure—” and Marian smiled with a
condescending graciousness, “Hi, Judy!”

Judy smiled back absently. Karl was saying urgently,

“Meet me here tomorrow at three.”

Judy nodded, “I’ll arrange it somehow.”

When she reached home, Lynne was ready to leave.
Mrs. Lurie’s eyes brightened as she looked at her
daughter. She hastily scribbled on her pad and held it
aloft, “You’ve color in your cheeks and your eyes have
their old luster. You’re one of those who blossom in sun
and air.”

“Yes, Mother,” Judy sweetly agreed, but she was deeply 117
aware of the real reason for the glowing cheeks and
brightened eyes—and judging from the smile lurking on
Lynne’s face, so was she!

That evening Mr. Lurie examined his schedule and

announced with great satisfaction, “Yes, I can come
home early tomorrow—last session at two-thirty. If I get
a ride, should be here ten minutes later.”

By two-thirty Judy was dressed. Her mother was in a

comfortable chair, her music in her hands which she
could study silently. That morning her pad had pleaded
for a rehearsal. The doctor was obdurate. “One hour
before you appear at the concert. Not before.”

Judy gave herself another fleeting glance at the mirror.

The candy-striped blue and white cotton with its full
skirt looks cool, Judy considered, even if I’m melting
inside of it. The embroidered collar, stiffly starched,
scratched—but then, she smiled, Karl has never seen
this dress. Maybe it didn’t have the smart elegance of
Marian’s tie silk, but it was fresh looking!

As she glanced at the clock, now two-forty-five, she

reviewed the things she must tell her father—the egg
nog, ready in the refrigerator, the watercress
sandwiches. She tiptoed into the bedroom.
Minna’s eyes opened. A descriptive arm indicated the
window saying plainly, “Why wait? Why don’t you leave
now?”

“There’s not that much rush. I’ll play something. The

P.S. (the family abbreviation for Practice Student) hasn’t
arrived. Something sweet and soothing to induce sleep.”

Remembered bits of Chopin Nocturnes, the “Minute

Waltz,” and the fingers stumbled exactly at the same
tricky places. Another look at the clock—the piano was
gladly relinquished to the late and harried P.S.

Judy went to the porch and anxiously scanned the 118

street. She returned, stared at the clock as its hands
moved relentlessly. At five minutes to four she heard her
father’s leisurely step.

“You’re an hour later than you promised—” she said

accusingly.

“Dear old faculty meeting—a special one!” he said

apologetically. “You needn’t hurry back. I’ll fix dinner—”

Judy was already at the door, mumbling something

incoherently about egg nog, refrigerator, watercress—
hearing only her father’s puzzled exclamation, “Where’s
the fire?” as she recklessly rushed down the porch
steps.

The cool, refreshing wind blew through her hair, but she
arrived at the Hall hot and breathless.

Judy blinked. The room seemed dim after the sunlight.

Two boys were in the room, one at the piano, the other
toying with an oboe or flute—she couldn’t tell which.
They stopped talking as she entered. She recognized
the colored boy whom she had met with Karl. “A brilliant
student,” Karl had told her, “completely at home in what
must be a new and strange environment.”

“Aren’t you James Powell?” she asked.

“Yes, of course, and you’re Judy. Hello!”

“Hello,” came in hollow tones from some remote region

of Judy’s chest. “You didn’t happen to see Karl here, did
you?” she asked diffidently.

“He left with a very cute number some fifteen minutes

ago,” the other boy volunteered with an innocent smirk.

As Judy made no comment, James added quickly, “He

seemed very put out, Judy, he’d been waiting around so
long—”

“Yes, I’m late, but it couldn’t be helped.”

“After supper I’ll stop at his home—I’ll give him a 119

message for you.”

“Don’t bother, James, but thanks just the same.”

On the street, the warm sunshine enveloped her like a

cloud. She raged at herself, at her father. Why couldn’t
he tell those stuffed shirts—And Karl? Well, he just
decided I couldn’t get away—and, of course, nobody
could use the phone. She tried not to feel hurt, yet he
could have waited a little longer.

Her dress looked squashed, the collar itched, her throat

felt parched. She was tired, too. All that useless running
and waiting—and hungry. She always felt hungry when
she was miserable.
“No, I won’t go home and sit around while Father
cynically probes, ‘Why back so soon?’”

She opened her bag, powdered her shiny nose, wiped

the perspiration from her neck and face. A look into her
change purse fortified her.

“I’m going to get the biggest chocolate fudge whipped

cream ice cream soda I can buy!”

She walked on aimlessly until she recognized the Cafe

and Snack Bar they’d visited the exciting night of the
Juillard Concert. It seemed so long ago! How happy she
had been, sitting next to Karl—Lynne and Allen, her
mother and father—everyone so gay.

She stepped up to the entrance and looked in at the

curtained window. It was empty, except for a waiter. No,
there in a far corner a table glittered with silver and
glassware, a teapot, cups and saucers. And there—
coming to the table was Karl! What heavenly luck! How
surprised he’ll be when he sees me! At that moment
Marian sat down, some music sheets in her hand. Judy
stood there ashamed, unable to move! Their heads
were close together. Marian was laughing—and Karl
looked, yes, looked adoringly into her eyes, just as he
looked at Judy at times. She tore herself away.

She walked woodenly on the familiar and often dearly 120

loved streets and at last stumbled home, bone tired.

As soon as dinner was over and her mother comfortably

in bed, Judy pleaded weariness.

“Good idea for us all to get to bed early. Tomorrow is

the big day,” her father smiled.
“You’re sure Mother’s going to be able to sing? It’s
wonderful, Father—”

Judy picked up her book, an ancient and much worn

copy of Les Miserables that she had found in some
neglected cabinet. The title appealed to her. With a
deprecating little smile at her father, she ascended the
staircase, much as Sidney Carton is said to have
ascended the gallows.

* * * * * * * *

It was a quarter to four on Wednesday afternoon. The

Amphitheater, as the Big Tent was sometimes called,
was packed, every seat taken.

Judy, no longer the lonesome stranger of those first

weeks in Aspen, knew many people. The children of the
camp were there. Even the youngest came to hear his
father play in the orchestra. They waved and smiled to
her and she waved back. But she was tense and
frightened, impatient for the concert to begin, and
wishing it were over. Her mother was well, the doctor
was more than satisfied. But could that terrible thing
happen again—

Mr. Izler Solomon, the conductor, stood on the podium,

bowing to acknowledge the applause. Judy sat through
Beethoven and Prokofieff, hardly knowing which was
which. Her mind was a blank, her heart was pounding.

121
 122
Minna Lurie stepped on stage, bowed at the ripple of
applause. Judy stared open-mouthed. Was that her
mother? So poised, so beautiful, in that shimmering
green dress? Solomon lifted his baton. The orchestra
began.

Minna Lurie’s lovely voice, as if in defiance of the

enforced rest, filled the tent. The flute, then the oboe
followed her clear notes. The strings came in. Judy sat
in a transport of joy. It seemed as if her mother’s voice
soared into the orange supports, into the poppy-colored
sides of the tent. She felt an ecstasy she had never
experienced.

The applause was deafening. “Wonderful!”

“Magnificent!”

Judy sat unable to move. Someone gripped her

shoulder. It was Lynne. Judy got up dazed. “Wasn’t she
marvelous, Judy? I’m so excited!” Lynne said.

People were leaving their seats and the crowd swirled

around them. Lynne said something about Saturday.

“What did you say, Lynne?” Judy asked.

“You remember. We’re going to Toklat and Ashcroft on

Saturday.”

“But I thought you went last Saturday?”

“No, we wouldn’t go without you.” Lynne was pushed

down the aisle. “Saturday,” she repeated. “We’ll call for
you at nine o’clock—”

Karl had made his way through the crowd. He pumped

Judy’s hand until it ached. The crowd moved toward the
exits and Judy and Karl were carried along in its stream.
They stood at the tent opening, the large flaps framing
them. The field where hundreds of cars had been
parked was being emptied swiftly. Many young people,
their arms linked, were walking over the rough ground.
Now the last stragglers appeared, the men of the
orchestra, carrying their instruments. Judy whispered,
“Mother and Father will soon be coming too.”

“Judy,” Karl said huskily, “why didn’t you come

yesterday?”

“I couldn’t leave Mother,” she said, turning her head so 123

that he shouldn’t see the hurt that was all but forgotten.

The sky was beginning to darken. Something sang in

their young hearts. There was no need for words. They
just stood there quietly, foolishly smiling at nothing at
all.

124
 11
JUDY, AMATEUR PSYCHOLOGIST

With the exaltation of a young acolyte returning to a

sacred task, Judy appeared at camp the morning
following the concert.

“Now let’s feed the ducks. Who’s in charge?”

“Paul.”

Their white-feathered friends were placidly waiting at

the water’s edge and after they were fed, swam out
toward the middle of the pond.

The children took their seats at the long wooden table.

“Where’s Willie?” Judy asked. “I saw him just a few

minutes ago.”

“Don’t bother about him! He’s a pest!”

“But I must—Oh, there he is under the table.”

On being called and asked to sit with the others, Willie

looked up and shook his head. “I don’t want to.”

He seemed so content playing with his little mounds of

dirt that Judy didn’t insist. The children were waiting.
She set bowls of wet clay and tubes of paint on the
table and distributed pipe cleaners.
“See how pliable they are. They bend easily to any
shape and with a pair of scissors can be cut any length.
I’m going to try to make a man out of this wire and fill
in the face with clay.”

The little group became interested. They suggested 125

their own ideas, horses and snakes, violins and
trombones. All were soon completely absorbed. Judy,
her head bent, was delicately painting the eyes and
mouth of her figurine. A stream of icy water descended
on her back. Jumping from shock and surprise, she lost
her balance and fell from the backless bench, her skirt
flying ignominiously over her head. The children were
convulsed with laughter as the water continued its
steady stream.

Rising clumsily to her feet, she looked around for the

cause. There a few feet back of her sat Willie holding
the garden hose while the children frantically cried,
“Turn it off!”

For one brief moment Judy stared at the little boy’s

cherubic face. The words of Gilbert and Sullivan flashed
through her mind, “Let the punishment fit the crime.”
She grasped the hose and turned it on Willie. “Now you
know how it feels to get soaked to the skin with all your
clothes on.”

The children shouted their approval. “He deserves

worse than that—” “Always tinkering with that hose—”

Judy asked the children to go back and finish their

projects. With as much dignity as she could command,
she and Willie, both dripping pools as they walked, went
toward the barn. Surprisingly enough, Willie hadn’t
uttered a sound nor shed a tear! She helped the boy
change into a pair of shorts discovered among the
costumes and Lynne’s discarded bathrobe did service for
her. Together they hung their wet clothes on the fence
where the hot sun would soon dry them.

“Willie,” she said, “let’s sit on the grass for a few

minutes before we go back to the others.” She studied
the boy and wondered what went on in that little head,
behind the woebegone little face.

126
 127
“I thought you liked me—Don’t you?” She pleaded. “I
had to punish you for your naughtiness.”
He said nothing for a moment, then unexpectedly, he
put his hand in hers. “I didn’t mean to do anything bad.”
His large eyes looked at her earnestly.

“But, Willie, you’re not a baby. I’m afraid I’ll have to

mention this to your mother.”

“Mommy’s sick. She’s always sick. You mustn’t bother

her.”

Judy was perplexed. “Willie,” she said gently, “tell me

why you put the hose on me?”

He looked at her as if surprised at her obtuseness. Then

he blurted out, “I wanted to water my garden and you
were in the way.”

“Your garden? I didn’t see any garden.”

“Oh, yes, there was, right under the table. I just wanted
to water it the way I do at home.”

“I see,” Judy said, not really seeing but trying to

understand.

“I can water all I like, all afternoon until Daddy gets

home. Your hose here is heavy. I couldn’t hold it right
—”

While the little boy was talking, Judy vaguely recalled

Allen’s speaking about Willie’s parents. His mother had
had a breakdown of some sort; mountain air and rest
were supposed to help. His father played the drums and
timpani in the orchestra and had a part-time job
besides. The boy was of necessity much alone. The
camp had been such a happy solution. But Judy had
forgotten the story and its possible bearing on little
Willie.

“The next time you want to water your garden at camp, 128
you must first ask permission,” she said. She put her
arms about the boy. “After all, I’m not a tree.” They
both laughed gaily. When they returned to the others,
Judy couldn’t help noticing an air of pleased expectancy
on their faces as if they rather hoped more fireworks
were in order.

“Willie didn’t intend to do anything mean,” Judy said

offhandedly. “He was trying to water his garden,” and
she pointed to the twigs planted in the mud.

Happy to dismiss the subject, she asked, “Let me see,

children, what you’ve accomplished?”

She was delighted with their skill and assured them that
the Aspen church would want to acquire the animals
and assorted instruments for its bazaar. “Then your
parents can buy them right back again,” she said
laughingly.

“Wouldn’t it be nice to let Willie take charge of feeding

the ducks this week? You don’t mind, Paul, do you?”

“But I do mind.”

“Look, Paul, Willie’s only five years old, the youngest in

camp. Don’t you think we could show him we don’t bear
any grudge, that we trust him enough to give him this
responsibility?”

The appeal to Paul’s better nature succeeded and Willie

was acclaimed the mascot for the week. In the days
that followed Willie followed Judy about camp much as
the little lamb is said to have followed Mary.

Several days later a jeep stopped at the camp entrance.

Judy was in charge as Lynne had taken a group
horseback riding. A man stepped out of the jeep and
moved in long, easy strides toward them. She wondered
who he could be until she heard Willie joyfully call out,
“Daddy! Daddy!”

She stopped the victrola and managed a sickly smile of

welcome. Willie’s father! He’s come to complain about
the hosing I gave his boy—maybe withdraw him from
the camp?

The man gave a brisk, “Hello, kids!” and stopped to

rough up his little boy’s hair. He was young and
handsome.

“Are you Judy?” he asked, addressing her. 129

She nodded and murmured, “Yes.”

“I was driving by. I can only stay for a minute. Is Lynne

around?”

“No. Is there anything I can do?” she asked weakly.

“Just tell Lynne I wanted her to know how sorry I was

to have missed Parents’ Day. I couldn’t get away.”

“Whew!” Judy almost said aloud in relief. “I’ll tell her,”

she smiled for the first time.

“But it’s you I really came to see.”

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