Ethical and Professional Standards Q105

105Avi Sharon is an analyst for Ariel Investment Management. He recommends the purchase of ABC company‟s stock after conducting due diligence on the company and has published a research report that is well accepted by the company‟s management. The business managers of ABC invite him for further discussions. They sponsor his air ticket and accommodations at an expensive hotel. Sharon, as per the policy of Ariel, discusses the travel and stay arrangements with his employer and is given permission. He further meets with the CFO in a dinner arranged by ABC and gives full disclosure to his employer upon his return. According to the Standards of Practice Handbook, has Sharon violated any CFA Institute Standard?

Option : C
Explanation : Sharon disclosed his travel and accommodation arrangements to his employer and had only accepted them after being given permission by his firm. His actions on return do not cause conflicts of interest between his company and ABC, because he makes a full disclosure of his dinner with the CFO to his employer.

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