Ethics Q from the self test

CFA Level I
#1

Which of the following is LEAST LIKELY to be considered a “material” piece of information regarding a company: A) A government report of economic trends affecting a company. B) A former CFO of the company predicting long-term decline in the company’s stock. C) Changes in company management. D) Loss of a customer representing a significant portion of a company’s gross sales. the Q is from the ethics the self-test…

#2

I just remember picking A and getting it wrong. I had thought a government report would be public information…

#3

One of the determinate of whether information is material or not is whether the holder or informer of information is credible. The example of a FORMER CFO saying that the prospects are not looking good is not as credible (AKA material) as they would not be a holder of any insider knowledge. My thoughts on that one, and it is the right answer from what I remember.

#4

approaching_c Wrote: ------------------------------------------------------- > I just remember picking A and getting it wrong. I > had thought a government report would be public > information… That’s exactly what I did! and the same way of thinking… government report =public info… Did anyone get it right?

#5

aussie_jaco Wrote: ------------------------------------------------------- > One of the determinate of whether information is > material or not is whether the holder or informer > of information is credible. > > The example of a FORMER CFO saying that the > prospects are not looking good is not as credible > (AKA material) as they would not be a holder of > any insider knowledge. > > My thoughts on that one, and it is the right > answer from what I remember. Ahh, yes, that’s right… I missed the word FORMER, reading answers too fast again… Thanks, aussie_jaco!

#6

IVC Wrote: ------------------------------------------------------- > That’s exactly what I did! and the same way of > thinking… government report =public info… > Did anyone get it right? Just remember the question is asking if the information is material not whether it is public or not - there is a difference.