In which scenario would a mutual fund dealing representative be following best practices for recommending an emerging markets mutual fund?

A mutual fund dealing representative should prioritize clear and transparent communication when recommending investment options. Emphasizing that the prospectus describes the emerging markets mutual fund as speculative for high-risk investors demonstrates adherence to best practices in managing client expectations and ensuring that the recommendation aligns with the client's risk tolerance.

This approach acknowledges the inherent risks of investing in emerging markets, which can be volatile and influenced by various socio-economic factors. By focusing on the prospectus language, the representative is guiding potential investors to understand the nature of their investment and the associated risks. This helps clients make informed decisions and properly assess whether the mutual fund is suitable for their investment profile.

In contrast, other scenarios either misrepresent the nature of investments or downplay the risks involved, which can lead to unrealistic expectations and potential dissatisfaction. Thus, highlighting the speculative nature of the fund as specified in the prospectus is the most responsible and ethical recommendation strategy.