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NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Research Analyst Profession

Which of the following is a conflict of interest that a research analyst must disclose in a research report under the Regulations?

A research analyst must disclose that the analyst or associates hold a financial interest in the subject company, because such a holding can bias the recommendation. Using spreadsheets, reading annual reports or emailing reports do not create a conflict of interest and need no disclosure.

  1. AThe analyst or associates hold financial interest in the subject company beyond the prescribed thresholdCorrect
  2. BThe analyst uses a spreadsheet to build the earnings model
  3. CThe analyst has read the company's annual report
  4. DThe analyst's report is delivered by email

Explanation

Disclosure is required where the analyst or associates have a financial interest in the subject company, as this may bias the recommendation. Using a spreadsheet, reading an annual report or using email creates no conflict of interest.

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