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NISM Certifications · NISM-Series-XV: Research Analyst · Qualities of a Good Research Report

Which of the following best describes the purpose of a disclosure of 'conflict of interest' placed in a research report?

A conflict of interest disclosure tells readers about any financial interest, holding or business relationship of the analyst or the firm in the subject company that could bias the opinion, so that readers can weigh the recommendation with full knowledge of possible bias.

  1. ATo inform readers of any financial interest or relationship of the analyst or firm that could bias the opinionCorrect
  2. BTo guarantee the accuracy of the target price
  3. CTo show the historical returns of the recommended stock
  4. DTo list the technical indicators used in the analysis

Explanation

A research report must make readers aware of relationships or holdings that could compromise objectivity, so they can judge the recommendation accordingly. The other options describe content unrelated to disclosure of conflicts.

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