Qbank: buy side or sell side

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) buy-side analyst and pay them performance-based fees. B) sell-side analyst and pay them on ad valorem basis. C) buy-side analyst and pay them on ad valorem basis. I chose B. The answer is C. I thought sell side only works for IBank when promoting the stock? Buy side should be the one making recommendation?

#2

I think I remember this question and thought is was B. What does the explanation say?

#3

Answer is C

#4

buy-side: when you research to find securities for your company’s portfolio sell-side: when you research to find securities to promote for clients to make them buy/sell for their own portfolios.

#5

I thought it was B but it’s pretty clear in the first sentence: "An investment management firm is preparing to hire an independent analyst to recommend security selections for the firm’s portfolio. " RTFQ

#6

This is Qbank #92706. The answer I have is B. "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. Performance-based fees are more complex to administer.

#7

AndyPettitteIsGreat Wrote: ------------------------------------------------------- > This is Qbank #92706. > > The answer I have is B. > > "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. Performance-based > fees are more complex to administer. Yeah I remember this question from a week ago. I answered C as well. Schweser def says it’s B tho. Doesn’t make sense to me.