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 evaluate potential bias?
Disclosure of ownership, investment banking relationships or compensation links between the analyst or firm and the issuer best helps readers evaluate possible bias, because it reveals conflicts of interest. Segment growth history and model descriptions relate to analysis content, not objectivity.
- AA statement of any ownership, investment banking relationship or compensation link between the analyst or firm and the issuerCorrect
- BA summary of the issuer's historical revenue growth by segment
- CA description of the valuation model used to derive the price target
Explanation
Disclosures of ownership, banking relationships and compensation reveal conflicts of interest that could bias the report. Revenue history and model description concern analysis content, not independence.
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