CFA Level I · CFA Level I Exam · Equity Analyst Research Reports
Which feature of a research report's disclosures section is most likely to help readers assess the objectivity of the analyst's recommendation?
Disclosure of any analyst or firm ownership in the subject company, or an investment banking relationship with it, best helps readers assess objectivity. It reveals potential conflicts of interest. Revenue history and industry structure are analytical content and say nothing about possible bias.
- AA statement of any ownership of the subject company's securities or investment banking relationship with itCorrect
- BA summary of the company's past five years of revenue growth
- CA description of the industry's competitive structure
Explanation
Disclosures of ownership, compensation and banking relationships reveal potential conflicts of interest that may bias a recommendation. Revenue history and industry structure are analytical content, not indicators of objectivity.
Did you get it right without looking?
One question tells you little. A timed set on Equity Analyst Research Reports shows your real accuracy, how long you take and where you lose marks.
More Equity Analyst Research Reports questions
- Which approach to risk analysis in a research report is most appropriate for communicating uncertainty around a company's forecasts?
- A research report supports a Buy rating mainly by citing only the analyst's most optimistic revenue scenario and does not mention the downsi…
- In an equity research report, the investment thesis is best described as:
- A research report's financial forecasts are most likely to be more credible if the analyst:
- An analyst values a company at 12 times forecast earnings per share (EPS). Base-case EPS is $4.00. In a downside scenario, EPS is 20% lower …
- Which feature of a research report's disclosures section is most likely to help readers evaluate potential bias?