Ethical and Professional Standards Q58

58Sylvia Lancaster, a CFA candidate, is hired by Trevor Securities as a junior analyst. James Brokovich is the director of research at Trevor and feels that Lancaster should cover equities in emerging markets because of their rapid growth. Lancaster reads various brokerage reports on the subject and talks to other analysts of the company. Brokovich also arranges for her to meet with an old friend, Bryan Lee, who is on the board of various East Asian companies. Lancaster is then asked to submit a report on the companies in the consumer durables industry of East Asia. Due to shortage of time, Lancaster finalizes her report based on her conversation with Lee and the brokerage reports, and gives her “buy” recommendations on Malaysian stocks from the consumer durables industry. Lancaster does not give reference of the brokerage reports as sources in her report. The Standard least likely violated by Lancaster is:

Option : C
Explanation : Lancaster has violated Standard I(C) Misrepresentation by not citing the brokerage reports as sources and Standard V(A) Diligence and Reasonable Basis because of her lack of independent research in the preparation of her report.

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