CFA Practice Question

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CFA Practice Question

An old college friend provides you with a stock tip. He had heard that XYZ, Inc. was the sole patent holder in a new technology that will increase gasoline mileage on any automobile by 20%. You immediately purchase the stock for all client portfolios where it is suitable.
A. Your actions are appropriate and do not violate the Standards.
B. You need to disclose your friend's position in the stock to your clients.
C. You do not have reasonable basis for this decision without further evaluation.

User Contributed Comments 3

User Comment
fding "immediately" --- careful!
superjam why is this not use of material non-public????
carnival because it's not proven to be material and non-public. he just heard it like a rumor. It's not from a insider.
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