标题: Good Ethics Question. [打印本页] 作者: leonardus 时间: 2013-3-31 13:06 标题: Good Ethics Question.
An analyst finds a stock that has had a low beta given its historical return, but its total risk has been commensurate with its return. When writing a research report about the stock for clients with well-diversified portfolios, according to Standard V(B), Communication with Clients and Prospective Clients, the analyst needs to mention:
A) both the historical beta and total risk and return.
B) the relationship of the historical total risk to return only.
C) the relationship of the historical beta and return only.作者: badonkus 时间: 2013-3-31 13:07
C.
Total risk is commensurate with Beta so he only needs to give relationship of beta and return.作者: Zestt 时间: 2013-3-31 13:07
I think he has great specific risk and the analyst should consider whether it is suitable to a well diversified portfolio.作者: giorgio10 时间: 2013-3-31 13:07
A, be as transparent as possible.作者: Sunshine4ever 时间: 2013-3-31 13:07
If I meet such question in exam , I still choose A for Communication needs to be fair ,accurate and complete . I think schweser questions are too subjective . I don’t trust them .作者: laurab 时间: 2013-3-31 13:07
Paraguay Wrote:
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C.
Total risk is commensurate with Beta so he only
needs to give relationship of beta and return.
More of a performance appraisal question really, than a ethics one
Although C is correct, I don’t think A is incorrect – it lends a clearer picture of the client作者: Rasec 时间: 2013-3-31 13:07
surely a low beta but high total risk is a sign of lots of nonsystematic risk. In a well diversified portfolio (in a integrated market) you need to look at Return vs Covariance (beta) not variance. Investor only faces systematic risk beta so C.作者: ayaz_mahmud369 时间: 2013-3-31 13:07
Communication needs to be fair ,accurate and complete . He only told beta and return but didn’t told the stock has large specific risk , I think his high return comes from high specific risk but not low beta. It is misleading.作者: bchadwick 时间: 2013-3-31 13:07
I’m going to answer according to CFAI, not cloud my head with third party provider interpretations of the code and standards.
