CDG Industry Ethics & Market Knowledge 3

Question 1

The FTC requires that diamonds described as 'lab-grown' or 'synthetic' must be:

Accepted Answer

Clearly distinguished from natural diamonds in marketing and labeling

Answer

FTC guidelines mandate that lab-grown diamonds be clearly identified to prevent consumer deception.

Question 2

A secondary diamond market is most accurately defined as:

Accepted Answer

Resale of previously owned or estate diamonds

Answer

The secondary market encompasses resale of previously owned diamonds through estate sales, auctions, and pawn transactions.

Question 3

A diamond grader who accepts gifts from clients in exchange for favorable grades is violating which core ethical principle?

Accepted Answer

Independence

Answer

Accepting gifts that influence grading outcomes compromises professional independence and objectivity.

Question 4

De Beers historically maintained high diamond prices primarily through:

Accepted Answer

Controlling the supply of rough diamonds entering the market

Answer

De Beers controlled a dominant share of rough diamond supply for decades, restricting flow to maintain pricing stability.

Question 5

When appraising a diamond for insurance replacement value, the standard is typically:

Accepted Answer

Retail replacement cost for a comparable stone

Answer

Insurance replacement value represents what it would cost to replace the item with a comparable one at current retail prices.

(CDG) Certified Diamond Grader Practice Test