Buy-side or sell-side question

CFA Level III
#1

An investment management firm is preparing to hire an independent analyst to recommend security selections for the firm’s portfolio. The firm would like to keep the manager’s compensation straightforward and predictable. Which of the following best describes the firm’s situation? The investment management firm wants to hire a: A) sell-side analyst and pay them on ad valorem basis. B) buy-side analyst and pay them performance-based fees. C) buy-side analyst and pay them on ad valorem basis

#2

C I think

#3

Going with A Rationale: Independent Analyst ~ Sell Side; Predictable Compensation ~ Ad valorem basis

#4

But research is provided for a buy side investment management firm, no?!!

#5

C

#6

I also went with C - although not totally sure of the reason from Schweser. ---------------------- Answer is A Sell-side analysts often work for an investment bank that uses the research to promote stocks the bank is selling. Sell-side research is also conducted by independent firms available for hire by investment managers. Ad valorem fees are straightforward and predictable. This is useful when the investor is budgeting investment fees. Performance-based fees are more complex to administer

#7

yipee!

#8

An investment management firm is preparing to hire an independent analyst to recommend security selections for the firmfs portfolio. Independent@analyst : I would think that buy side are more independent compared to sell side analyst . No?

#9

flapechino Wrote: ------------------------------------------------------- > An investment management firm is preparing to hire > an independent analyst to recommend security > selections for the firmfs portfolio. > > Independent@analyst : I would think that buy > side are more independent compared to sell side > analyst . > > No? I agree, it sounded like a buy side firm wanted to hire an analyst who would then be a buy side analyst in my mind. Whatever.

#10

A

#11

I am caught by this one too. By definition we have: left: buy side middle: independent right: sell side when does middle become the new right?

#12

well I still do not understand this one, but then again, did we ever see this in the text? regarding buy side analyst or sell side analyst. maybe related to ethics ? honestly speaking, do not remember which LOS applies to this kind of question.