An analyst has found an investment with what appears to be a great return-to-risk ratio. The analyst double-checks the data for accuracy, keeps careful records, and is careful to not make any misrepresentations as he simultaneously sends an e-mail to all his clients with a “buy” recommendation. According to Standard V(A), Diligence and Reasonable Basis, the analyst has: A) violated the Standard if he does not verify whether the investment is appropriate for all the clients. B) violated the Standard by communicating the recommendation via e-mail. C) violated the Standard if he does not file a report with the SEC. D) fulfilled all obligations.
I’d say A. If not A, then D.
A would be my answer.
A
Why would it be A? This guy’s an analyst, not an investment manager. He will dessiminate his opinion to everybody, and the clients, i.e. the Managers would then take the opinion and decide which a/c it is suitable for. I’d go with D.
that’s a good point…I didn’t think of it in that light.
D.
nb123 Wrote: ------------------------------------------------------- > Why would it be A? This guy’s an analyst, not an > investment manager. He will dessiminate his > opinion to everybody, and the clients, i.e. the > Managers would then take the opinion and decide > which a/c it is suitable for. I’d go with D. Good job ! … I picked A as well but as you said the answer is “D” based on your logic. I liked the question because I always assumed that whatever goes on the adviser goes on the analyst, but turns out that’s not always the case.
nb123 gets the gold star for the day.
It’s D, nb123 got it. I had this probelm and I think I picked A but D does make more sense.
I will pick A.
I picked A too but D makes perfect sense - the key word is ‘analyst’!
Yeah, in general, you need to check for appropriateness, but that is not the standard that is being tested in this question. These questions annoy me: John, CFA, killed his supervisor and ran away with his wife, with whom he was having an affair. Does this constitute an ethics violation of standard X(I) section 7, market manipulation?
I am a superstar!! Everything I did today made me feel dumb, until I logged onto AF.
bchadwick Wrote: ------------------------------------------------------- > Yeah, in general, you need to check for > appropriateness, but that is not the standard that > is being tested in this question. > > These questions annoy me: John, CFA, killed his > supervisor and ran away with his wife, with whom > he was having an affair. Does this constitute an > ethics violation of standard X(I) section 7, > market manipulation? Not if disclosed it in his reports …
ahhahah…I find that “such such is disclosed in his report” is a trump card. heck, you can say that the money source is from drug dealing as long as it is disclosed, that is not a violation!!! WTF
But that could be an AML issue 