Ethical and Professional Standards Q121

121BU Airlines has taken INR 1.1 billion of debt and is unable to service it. The stock prices have been falling and some investors are accumulating the stock in the hope it will rise soon. Most investors are unaware of the health of the lossmaking airline. The research team at Emitus Investment Management, covers the stock and wants to publish an adverse opinion on the stock. The firm‟s policy does not permit dissemination of a negative opinion about a client, as it was the underwriter when BU went public two years ago. The best course of action is:

Option : B
Explanation : The recommended course of action would be to put BU Airlines on a restricted list and disseminate only factual data. Refer to Standard I(B) Independence and Objectivity.

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