CFA Practice Question
According to Standard V (B) - Communication with Clients and Prospective Clients, members should consider including the following information in research reports, except:
A. expected annual rate of return and/or yield-to-maturity.
B. annual amount of income expected, and degree of uncertainty associated with the cash flows.
C. the methodology that drove the investment decisions.
Explanation: All the information has to be included in the research reports except the methodology that drove the investment decision, which is part of the 'maintaining files' compliance procedure for Standard V (C).
User Contributed Comments 4
| User | Comment |
|---|---|
| Birdy101 | Standard V (C): Record Retention.
also V(B) requires general principles how investment was selected. Don t see much difference here to methodology... |
| rgat | Stdandar V.(B) clearly instructs to disclose format and principles of the investment process used to analyze the investment...That sounds to me just like the description of the term methodology=principles and process. |
| Rob09 | Refer to Example 1 on page 86 of Book 1, it states that the client must be informed of the "basic process and logic" (not the methodology) of the investment decision in research reports. |
| Andy552 | You only need to inform the client of the methodology if it has been significantly affected or changed in any way. Otherwise it's part of compliance notes/disclosures. |