ethic: report report

former

if a method (for example: multi-factor model) is used to reach a buy recommendation, when prepare the resport, is the supervisor asked to remove the model but leave the buy recommendation there, does it violate any cfa standard? as the conclusion is reached by using multi-factor model....

smuggycfa

Thats a good question...

I know that NOT ALL relevant info has to be included int he report based on some of the practice tests I've taken.

However if you derive the BUY based on a certain model, it seems appropriate to have to include the valuation model.

I would say that removing the valuation basis is a violation....pure guess though.

huangxiaoxie

Whatever method is used to make a method must be explained with atleast basic characteristics and assumptions. The investor needs to how you select investments so he can gauge whether its appropriate for what he wants to do or fits with his overall portfolio.

KungFuPanda

My question is based on a text book case Apfelbaum Kapital Case Scenario2, volume 1, page 121. the supervisor recommend to remove the metion of multifactor model from his staff's report, because the supervisor is not familiar with multifactor model. they leave the buy recommendation in the report......

if I have time, I will try to get back to the text book,
justinkc Wrote:
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> Whatever method is used to make a method must be
> explained with atleast basic characteristics and
> assumptions. The investor needs to how you select
> investments so he can gauge whether its
> appropriate for what he wants to do or fits with
> his overall portfolio.

thecfawannabe

I just looked up the question, and you left out a huge part of the question. The company uses top down approach for analysis. Which is what they have done in the past. The quantitative analysis was taken out because they have never used it. If they had used it, it would have been a violation because they are changing investment principles. So the supervisor was correct in taking it out. The answer for the question seems pretty clear in the book....

ningning1984

In any case, you dont need to give up your model, just explain the basics. Otherwise, a lot of guys on the street would be in serious trouble at the moment...