CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

William Michael, CFA, is the research analyst responsible for following Company X. All the information he has accumulated and documented suggests that the stock should be rated a weak "hold," because the outlook for the firm's new products is poor. During a recent luncheon, however, Michael overheard a financial analyst from another firm offer opinions that conflicted with his own forecasts and expectations. Upon returning to his office, Michael released a strong "buy" recommendation to the public based on this new information.
A. Michael violated CFA Institute's Standards of Professional Conduct by failing to distinguish between facts and opinions in his recommendation.
B. Michael violated CFA Institute's Standards of Professional Conduct because he did not seek approval of the change from his firm's compliance department.
C. Michael violated CFA Institute's Standards of Professional Conduct because he did not have a reasonable and adequate basis for his recommendation.

User Contributed Comments 4

User Comment
sungryongl why can't A be an answer.. apparently Michael changed his recommendation from eavesdropping a conversation.
Inaganti6 Because C includes A.
Batoold89 There's a similar example in the curriculum that says the person failed to distinguish between fact and opinion... this is confusing. I do think though that the correct answer is C.
Sachin17 I said A as well. I do agree with Inaganti6 that C includes A, as reasonable and adequate basis should encompass distinguishing between fact and opinion
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