A research analyst covering a company has collected and analyzed a lot of information that suggests...
A research analyst covering a company has collected and analyzed a lot of information that suggests the company's stock should be rated a weak "hold" because the demand for the firms new products is poor. During a conversation with other analysts, he learns of takeover rumors regarding the company. The analyst immediately upgrades his recommendation to "buy" based on this new information. The analyst:
violated the CFA Institute Standards of Professional Conduct by failing to distinguish between facts and opinions in his recommendation.
violated the CFA Institute Standards of Professional Conduct because he did not seek approval of the change from his firm's compliance department.
violated the CFA Institute Standards of Professional Conduct because he did not have a reasonable and adequate basis for his recommendation.
Homework Answers
Hello Sir / Mam
Your required answer is OPTION C : violated the CFA Institute Standards of Professional Conduct because he did not have a reasonable and adequate basis for his recommendation.
CFA Institute Standards of Professional Conduct requires the members to exercise diligence and have reasonable and adequate basis for recommendation supported by appropriate research and investigation. This is lacking in this case.
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