Question #9 - Reading 42.5 Standards of Professional Conduct Guidance for Standards V

Reading: Reading 42.5 Standards of Professional Conduct Guidance for Standards V

PDF File: Reading 42.5 Standards of Professional Conduct Guidance for Standards V.pdf

Page: 7

Status: Unattempted

Correct Answer: A

Shared Context

- Under the CFA Institute Code and Standards, it is the responsibility of the Director of Research, a CFA Institute member to: A) exercise reasonable supervision over those subject to their supervision or authority to prevent any violation of applicable statues, regulations or provisions of the Code and Standards. B) both of these. C) not knowingly participate or assist in any violation of laws, rules, or regulations.

Question

Under the current circumstances, the Director of Research should:

Answer Choices:

A. allow the report to be distributed, as is

B. require the report to be redone to ensure compliance with CFA Institute Standards

C. require the report to be redone with a neutral or hold rating pending the outcome of the awarding of the investment banking business

Explanation

Based on the current circumstances, the supervisor (Director of Research) must not allow the report to be distributed. In this situation the overriding responsibility is to ensure that diligence, thoroughness, and independence be exercised in forming the investment judgment and in preparing the research report.

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