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

Under Standard V(C) Record Retention, an analyst reviews a company in depth but decides to make no change to the portfolio position. Which statement is most accurate regarding the analyst's record-keeping responsibility?

The analyst must retain records of the review even though the position did not change. Standard V(C) applies to buy and sell decisions and equally to reviews that lead to no change in position, because the records substantiate the scope of the research and the reasons for the conclusion.

  1. ARecords are required only when the review leads to a purchase or sale
  2. BThe analyst must retain records of the review even though the position did not changeCorrect
  3. CRecords are required only if a client asks for an explanation of the review

Explanation

The Standard's guidance states that the retention requirement applies to decisions to buy or sell a security as well as to reviews that do not lead to a change in position. Options A and C add conditions that the Standard does not impose.

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