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CFA Level I · CFA Level I Exam · Guidance for Standard V: Investment Analysis, Recommendations, and Actions

An investment committee reviews a stock but decides after discussion to make no change to its holding. One member, Lena Ortiz, argues that because no trade resulted, no records of the review need be kept. Which statement about record retention is most accurate under Standard V(C)?

Records of the review, including model inputs and outputs, should be kept even though no position changed. Standard V(C) requires records substantiating research scope and reasons for conclusions, covering reviews that do not result in a change in position as well as trades.

  1. ARecords are needed only for reviews that lead to a buy or sell decision.
  2. BRecords of the review, including model inputs and outputs, should be retained even though no position changed.Correct
  3. COnly final committee minutes need retention; model inputs may be discarded.

Explanation

The retention requirement applies to decisions to buy or sell and also to reviews that do not lead to a change in position. Computer-based model input parameters and outputs are listed as supporting documentation. Options A and C narrow the requirement incorrectly.

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