Ethical and Professional Standards Q115

115Mary Burnette supervises a team of research analysts at Brigham Money Managers. One of her team member Siri Desai, an auto analyst, follows various websites and blogs for research purposes on the auto industry. Desai while browsing through the internet comes across a report by an independent research analyst on the hybrid car introduced by Koyota Motor Company. Based on that report she gives a recommendation of „buy‟ in her research report without giving reference of her source. Burnette is under a deadline by her firm to compile the reports and to implement the recommendations. She does not review Desai‟s work and sets up a meeting with the portfolio managers to discuss the execution strategy based on the research reports submitted by her team. Burnette least likely violated the CFA Institute Standard of:

Option : C
Explanation : Burnette has violated Standard IV(C) Responsibilities of Supervisors by neglecting to review thoroughly Desai’s report and her recommendations. It is Burnette’s responsibility to set up appropriate procedures; these are documented, communicated and followed by the personnel working for her. She has also violated Standard of Diligence and Reasonable basis.

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