the answer is 1 why is it not 3. the justification for the answer not being 3 is because other types of risks such as different accounting regulations/country specific risks etc were not considered but he identified some of the risks that should be considered such as inflation/long duration etc. should we expect going forward that all of the risks should be listed out otherwise its wrong? he also explained benefits so it sounds like he did do diligence and has reasonable basis.
can anyone specifically point out why 3 should not be the answer?
I answered this question wrong the first time I tried (I thought the right answers was 3 as well). I cant see why he is consistent with performance presentation when he didnt talk about the investment risk to his client. I mean, can I just present an investment opportunity, talk about the upside, not talk about the possible losses, and still be consistent with performance presentation?
He has reviewed similar other projects but has he reviewed this one in details? no then his action is not consistent with Diligence and Reasonable Basis