1215

An analyst has been covering a particular firm for years. Recently, the analyst’s uncle died and left the analyst a sizable position in the firm’s stock. The analyst needs to:

A) refuse to receive the stock in the first place.

B) do nothing since the analyst did not purchase the stock.

C) disclose the ownership of the stock to his supervisor.

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The only thing the analyst needs to do is to disclose the ownership of the stock to his supervisor in accordance to Standard VI(A), Disclosure of Conflicts. Refusing to receive the stock could be acceptable option, but is not required.

1215

Ryan Brown, CFA, is an analyst with a large insurance company. His personal portfolio includes a significant investment in QRS common stock that his firm does not currently follow. The director of the research department asked Brown to analyze QRS and write a report about its investment potential. Based on CFA Institute Standards of Professional Conduct, Brown should:

A) sell his shares of QRS before completing the report.

B) decline to write the report without specific approval of his supervisor.

C) disclose the ownership of the stock to his employer and in the report.

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Members are required to act on behalf of their clients, placing their clients’ interests ahead of their own. Brown should disclose his personal ownership of QRS to his employer and also in the report.