Question #19
Reading: Reading 42.2 Standards of Professional Conduct Guidance for Standards II
PDF File: Reading 42.2 Standards of Professional Conduct Guidance for Standards II.pdf
Page: 11
Status: Correct
Correct Answer: B
Question
An analyst is allowed to trade on information that he has predicted, such as a corporate action or event, using perceptive assembly and analysis of public information and nonmaterial nonpublic information. This is called the:
Answer Choices:
A. deduction theory
B. mosaic theory
C. assessment theory
Explanation
Based on the mosaic theory, a member or candidate may act on a combination of public
information and nonmaterial nonpublic information, without violating Standard II(A)
Material Nonpublic Information.
(Module 42.3, LOS 42: II(A))