CFA Practice Question

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.
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