Q34, p.122, CFAI vol 1. This is also in exam 2006. Why is Dean NOT violating “by accepting payment from the companies she covers”? Note that she “does not reveal this fact to readers of her reports”. I think it should be D instead of B. The solution also says it “must be disclosed prominently and in plain language”.
I remember that Q. She was rcving some modest fees from the co she covers. Equal fees and modest, modest enough which would not distract her objectivity. Using so called common sence, I said no violation. But like you said, without disclosing, investors,readers would never know such fact, that she is rcving fees. What fee exactly do you draw a line, above 100$ or below 100$ or there is no such standards, I agree with you sticky.
flapechino Wrote: ------------------------------------------------------- > I remember that Q. > > She was rcving some modest fees from the co she > covers. > Equal fees and modest, modest enough which would > not distract her objectivity. > Using so called common sence, I said no violation. alright, so the key point with the fee is that the fee is FLAT ---- and that won’t affect her independence and objectivity, right? In this sense, I agree. But as you say below, this “acceptance of payment” needs to be disclosed to readers as well, so how can “acceptance of payment” be compliant? sigh … > But like you said, without disclosing, > investors,readers would never know such fact, that > she is rcving fees. > > What fee exactly do you draw a line, above 100$ > or below 100$ or there is no such standards, > > I agree with you sticky. sigh … what should I pick when something like this turns up again @_@
sticky, I happend to rvw this one today. I think you are dead right about this. She is absolutely violating because she is not disclosing it !!!
think key here is Dean failed to disclosure the conflict of interest and claim the report to be independent. accepting payments is not a violation, it’s a violation not disclosing it. think B is better than D. i picked D initially as well… 
flat fee only
flat fee is a recommendation right?