Q18. Stroh attempted to maintain the confidence of his research methods by not revealing them in his report. By doing so, Stroh:

A)   is neither helping nor harming the consumers of his report, as long as he reaches logical conclusions from the information the sources provide.

B)   may have violated the standards related to known limitations of his analysis and material misrepresentation by omitting the source of his information and other facts that led to his conclusions.

C)   is exercising discretion in order to maintain a competitive edge.

Q19. With respect to Stroh’s recommendations, the mosaic principle could play a role with respect to the use of which piece of information?

A)   The purchase of the glass manufacturing company in the country.

B)   The comparative advantage of the country in manufacturing.

C)   The partnering of APX with the government’s car parts operations.

答案和详解如下：

Q18. Stroh attempted to maintain the confidence of his research methods by not revealing them in his report. By doing so, Stroh:

A)   is neither helping nor harming the consumers of his report, as long as he reaches logical conclusions from the information the sources provide.

B)   may have violated the standards related to known limitations of his analysis and material misrepresentation by omitting the source of his information and other facts that led to his conclusions.

C)   is exercising discretion in order to maintain a competitive edge.

Correct answer is B)

Standard V(A), Diligence and Reasonable Basis, and Standard V(B), Communication with Clients and Prospective Clients. Known limitations of the analysis and conclusions should be documented in research reports. Material misrepresentations should also be avoided by including all pertinent information and by distinguishing between opinion and fact in the analysis and conclusions of a report. Stroh may have violated the standards related to known limitations in his analysis by rushing to provide a recommendation. Stroh felt somewhat unable to perform an analysis given the lack of essential data, but completed a report where the conclusions are largely driven by information derived from conversations that were not included or referenced in the report. These missing facts may also be construed as material misrepresentation. However, at no time should material nonpublic information be used for, or reported in, recommendations that are produced by Stroh or ECM.

Q19. With respect to Stroh’s recommendations, the mosaic principle could play a role with respect to the use of which piece of information?

A)   The purchase of the glass manufacturing company in the country.

B)   The comparative advantage of the country in manufacturing.

C)   The partnering of APX with the government’s car parts operations.

Correct answer is B)

Stroh could not use the information concerning the car parts partnering, the purchase of the glass manufacturing company, or IMI's withdrawal from partnering because some or all of this information was passed on to him via insiders with the information being material nonpublic information and therefore cannot be traded upon. The Mosaic principle could only play a role in the material public information regarding the comparative advantage of the country.