From the 2008 CFAI sample exam… Sallie Lewis, CFA, is a research analyst covering the mining industry. Along with other analysts, Lewis visit the primary mine of Gold Rush Mines (GR). During the visit, a major piece of equipment fails and Lewis overhears an unidentified employee state that production will be stalled for six months. Lewis immediately files a sell recommendation on GR without any additional research. Has Lewis violated any CFA Institute Standards? A. No B. Yes, with respect to client confidentiality C. Yes, with respect to diligence and reasonable basis D. Yes, with respect to material nonpublic information The answer is absolutely BS
From your reaction, is the answer A? lol.
C - “Lewis immediately files a sell recommendation on GR without any additional research”
Its gotta be C
unidentified employee - so the answer is C. if say, he overheard from CEO,CFO and no phrase like ‘without any additional research’ the ans would be D anyone?
I picked C but answer key shows A, I think there has to be something wrong with answer key on this problem
the answer shows A? where did you get this question from? the answer is def C…
A. Doesn’t this question have to do with the mosaic theory?? You won’t see too many questions like this one ever, but you have to think a little outside the box. No non-material public information was given to the analyst at the time.
In my opinion, it is C as well…weird that is showing A, indeedy.
Chuckrox8 Wrote: ------------------------------------------------------- > A. Doesn’t this question have to do with the > mosaic theory?? You won’t see too many questions > like this one ever, but you have to think a little > outside the box. No non-material public > information was given to the analyst at the time. I agree with most that it should be C Is it non public…yes. Is it material…who knows. She is taking the uninformed opinion of a line employee. For all she knows he has no expertise with the equipment in question and is being pessimistic. In my experience look at the question; Lewis “immediately files a sell recommendation” on GR “without any additional research”. Two red flags that she has definitely violated reasonable basis. I also agree that there is no way it should be A
I agree with: C
I also agree that it should be C.
I also would’ve gone with C but I guess since the analyst was there when the major peice of equipment failed, the analyst had first hand knowledge of the problem.
This question leaves a little too much on the table. Personally, I would have said A though.
Being a mock exam, there are no explanation given for the answer, but the person who provided the problem did put a comment in there about it being mosaic theory. Maybe this question will appear again when the mock exam becomes available to us. There were a few questions on the 2008 mock that I saw in the 2009 sample
I just did the mock exam 2009, and did this one wrong because I had read this topic. According to the answer key, the answer for this question is C. So no need for more argument.
And this one should have nothing to do with Mosaic Theory. Mosaic Theory is, as an analyst, you are allowed to assimilate data from various Material Public and Non Material Non Public information to come up with you final analysis. Here, she overheard some un-identified person and immediately issued her analysis based on that single information. It hardly qualifies as a mosaic of multiple informations.