Ethical and Professional Standards Q45

45Wynona Fritz works for Brady Brokerage as a fixed income analyst. She is also registered to take the Level III examination. After analyzing both the qualitative and quantitative aspects of Saber Inc., Fritz concludes that the company is not correctly rated by the credit rating agency and should be downgraded due to the leverage in its capital structure. A senior manager from the investment banking department informs her that Saber Inc. has chosen Brady Brokerage as one of the firms to underwrite and market their new bond issue. Fritz is concerned that her report will cause the company to terminate its relationship with Brady and affect her employment. According to the Standards, Fritz should:

Option : B
Explanation : Fritz should be independent and objective in her report. Alternatively, Brady Brokerage could place Saber Inc. on a restricted list and issue only factual information. Refer to Standard I(B) Independence and Objectivity.

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