Which one would you choose

2020 practice exam volume 1 exam 2 afternoon session question 1.

“Bernard Brigand, CFA, works for Monumental managers. He has recently developed a model based on the analysis of wage growth in the hospitality industry. He gathered historic information covering the last six months and has concluded that there is a correlation between monthly wage changes and earnings growth.
As part of Brigand’s analysis, Brigand visited the Labor Department website and noticed an interesting article. Brigand used the information in this article as the basis for some of his recommendations to clients. On a later occasion he revisited the same website and saw that not only had the article been removed, but a notice had been posted saying that the article had been placed there in error and had contained classified information. However, by this time some of Brigand’s clients had acted on the recommendation and had made a profit”

Has Brigand breached CFA Institute’s Standards of Professional Conduct in passing his hospitality industry analysis and recommendations to clients?
A. No
B. Yes, in violation of standard V(A): Investment Analysis, Recommendations, and Actions - Diligence and Reasonable Basis as he used insufficient data.
C. Yes, in violation of standard II(A): Integrity of Capital Markets - Material Nonpublic Information since he used a classified Labor Department document

1 Like

:honeybee: :b:

B - 6 months of monthly data is statistically pish and nothing to suggest the article was both material and non-public information

whats the right answer?

It’s B

is this becuz 6 months data used? what if the sufficient data was used, then what happen

B , because Diligence and resonable basis