CFA CFA Level 2 Question of the Week: Level 2 – Ethics

Question of the Week: Level 2 – Ethics

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    • MarkMeldrum
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      Richard Colson is a research analyst at Aegis Capital.  One of his target companies, Ricard Industries, recently became a client of Aegis investment banking division.  Due to the potential conflict of interest, according to Standard I(B) Independence and Objectivity, Colson should most likely:

      • A. discontinue research on Ricard and not issue a report.
      • B. continue the research, and issue a report on Ricard that contains a
        recommendation consistent with their findings.
      • C. continue the research, and issue a report on Ricard that contains only
        factual information, but no recommendation.
    • MarkMeldrum
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      The correct answer is Option C.

      Due to the potential conflict of interest, Colson should not issue a recommendation on Ricard, as he could be perceived as lacking independence and objectivity.

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