Question #19
Reading: Reading 42.3 Standards of Professional Conduct Guidance for Standards III
PDF File: Reading 42.3 Standards of Professional Conduct Guidance for Standards III.pdf
Page: 8
Status: Correct
Correct Answer: A
Question
An independent analyst has only one client. One of the client's largest holdings is a brokerage firm. Because of the large holding by his client, the brokerage firm recently began allowing the analyst to tap into the firm's computer network to use the firm's research facilities. This is allowable as long as the analyst:
Answer Choices:
A. discloses the relationship to the client
B. does both of the actions listed here
C. uses the resources to help manage the client's account
Explanation
According to Standard III(A), Loyalty, Prudence, and Care, the analyst must put the client
first and inform the client of any possible conflicts of interest. The analyst must channel
any benefits derived from his service to the client, back to the client, and inform the client
of the benefits.
(Module 42.4, LOS 42: III(A))