CFA Practice Question
Giovanni Fellini, CFA runs an investment advisory firm. He purchases third party research on PUD Corporation that concludes that PUD is underpriced. After determining that PUD is appropriate investment for his clients, he sends out a research report recommending they invest in PUD. Fellini is in violation of the Standards?
A. No.
B. Yes, Duty to Clients.
C. Yes, Diligence and Reasonable Basis.
Explanation: Third party research is okay as long as analyst determines the investment is appropriate.
User Contributed Comments 3
| User | Comment |
|---|---|
| Kathkun | Third-party research is okay if the member makes reasonable and diligent effort to determine whether the research is sound. |
| Mikehuynh | Agree with Kathkun. Giovanni can use report from his company or third party provided that he makes reasonable and diligent effort to make sure the report is good. |
| sunday128 | Determining it being appropriate equates due diligence done before recommending? I picked C simply because it didn't say he personally researched adequately prior to making a decision solely based on the report. |