CFA Practice Question

CFA Practice Question

Judy Greffner is an analyst with Buy My Lunch Associates. She is approached by a stock marketing agency that asks her to publish a positive recommendation on a small stock, Hope We Make It Inc., in exchange for a trip to Bahamas, all expenses paid so as not to leave any paper trail. Judy accepts the offer and issues a strong buy on Hope even though she believes it is a neutral prospect at best. Judy has violated

I. Standard IV (B) - Additional Compensation Arrangements.
II. Standard VI (A) - Disclosure of Conflicts.
III. Standard I (B) - Independence and Objectivity.
A. I and II.
B. I and III.
C. I, II and III.
Explanation: By accepting an expense paid trip to Bahamas and not disclosing it has triggered the violation of standard on disclosure of additional compensation. By changing her opinion on the recommendation she has violated the standards on independence and objectivity as well as disclosure of conflicts of interest to clients.

User Contributed Comments 1

User Comment
Birdy101 choose III: as she doesn t have a benefical ownership
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