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NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Research Analyst Profession

A research analyst at a firm in Mumbai is preparing a report. Consider these statements: (1) The analyst's view should be supported by a reasonable basis and data; (2) A recommendation may be issued without any documented rationale if the client is a large institution; (3) Material conflicts must be disclosed to readers. Which combination is consistent with professional standards?

Only statements 1 and 3 are consistent with professional standards: views need a reasonable, data-supported basis, and material conflicts must be disclosed. A recommendation cannot skip a documented rationale merely because the client is a large institution, since the requirement applies to all clients equally.

  1. A1 and 2 only
  2. B2 and 3 only
  3. C1 and 3 onlyCorrect
  4. D1, 2 and 3

Explanation

A recommendation needs a reasonable, documented basis regardless of who the client is, so statement 2 is wrong. Statements 1 and 3 reflect the standards of having a sound basis and disclosing material conflicts. Therefore only 1 and 3 are consistent.

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