CFA Level I · CFA Level I Exam · Equity Analyst Research Reports
In an equity research report, the investment thesis is best described as:
The investment thesis is the central rationale of the report. It explains why the analyst believes the security is mispriced relative to intrinsic value and what catalysts or developments should lead the market to recognise that value. Disclosures and ratio tables support it but are not the thesis.
- Aa summary of the analyst's compensation and disclosure statements
- Bthe central rationale explaining why the analyst expects the security to be mispriced and how that will be resolvedCorrect
- Ca table of historical financial ratios for the subject company and its peers
Explanation
The investment thesis states why the analyst believes the security is mispriced and what will cause the market price to converge toward value. Disclosures and historical ratio tables are supporting report sections, not the thesis itself.
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