Ethical and Professional Standards Q84

84Richard Swanson, an analyst at Azwitz Securities, covers the oil industry. He, along with other analysts, has just visited Prell Refineries, an exploration and production company. Based on his own assessment and calculation of the drilling on-site, Swanson has concluded that the company has abundant oil reserves. This view is not shared by the other analysts who have visited the site. Swanson writes in his research report that Prell is in fact sitting on vast oil reserves and makes a buy recommendation. Has Swanson violated any of the CFA Institute Standards of Professional Conduct?

Option : B
Explanation : Standard V(B) Communication with Client and Prospective Clients has been violated, because Swanson’s assessment is an opinion not a fact. He did not distinguish between opinion and fact.

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