CFA Level I · CFA Level I Exam · Guidance for Standard II: Integrity of Capital Markets
A widely respected analyst changes a recommendation, and the change alone is likely to move the market. Regarding whether the analyst must release the report to the public, the guidance most likely indicates that:
Investors who are not clients can either do the analysis themselves or become clients to access the analyst's expertise. Because the analyst is not an insider and built the report from public information, market materiality of the conclusion does not require the analyst to make the work public.
- Athe report must be released because the public would find it material
- Binvestors who are not clients can do the work themselves or become clientsCorrect
- Cthe report may be released only after the analyst's firm trades on it
Explanation
The analyst is not a company insider and presumably built the report from public information using expertise. The fact that the public would find the conclusions material does not require the analyst to publish them. Non-clients can do the work themselves or become clients to gain access.
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