CFA Level I · CFA Level I Exam · Equity Analyst Research Reports
Which section of an equity research report is most likely to explain why the analyst's valuation differs from the current market price and what could cause the recommendation to change?
The investment thesis and valuation discussion, with the risks section, explain why the analyst's value differs from market price and what could alter the recommendation. Disclosures address conflicts and certification, and appendix tables merely present historical data without explaining the analyst's reasoning.
- AThe investment thesis and valuation discussion, together with the risks sectionCorrect
- BThe disclosures page listing the analyst's certification
- CThe appendix containing historical financial statement tables
Explanation
The thesis and valuation sections explain the view versus the market price, and the risks section identifies factors that could invalidate it. Disclosures cover conflicts and certification, and appendix tables only provide data.
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