CFA Level I · CFA Level I Exam · Guidance for Standard II: Integrity of Capital Markets
Which statement about analysts' initiatives to discover and analyze information is most accurate under the guidance on Standard II(A)?
Analysts' initiatives to discover and analyze information, and to communicate their findings to clients, significantly enhance market efficiency and benefit all investors. The guidance encourages looking beyond the company to customers, suppliers and competitors, so such effort is valued rather than seen as unfair.
- AThey erode market efficiency by giving clients an informational edge.
- BThey significantly enhance market efficiency, benefiting all investors.Correct
- CThey are acceptable only when based on information supplied by company insiders.
Explanation
The guidance states that analysts' initiatives to discover and analyze information and communicate findings to clients significantly enhance market efficiency, benefiting all investors. Analysts also reach beyond the company to customers, suppliers and competitors, so insider-only sourcing is not required.
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