Misrepresentation identified, include, example, prepared

manchester88

CFAI Book, P60

one of the practices include:

presenting statistical estimates of forecasts prepared by others with the source identified but without qualifying statement or caveats that may have been used.

what does it mean? can someone offer an example on this one?

Thx!

Daniel1985

that clear things up, thanks!

dmar

"presenting statistical estimates of forecasts prepared by others with the source identified but without qualifying statement or caveats that may have been used. "


Its on Page 30 of CFAI text. Anyways, this means that although you are presenting the result of the forecast prepared by others, you are not considering the conditions under which it will hold true

Ex. An analyst predicts that the stock market will appreciate by 20% (provided the economy grows by 10%). So although you mention the result (stock market will appreciate) and the source (the analyst), you do no mention the conditions under which its possible (i.e. the economy grows by 10%).

In other words, the assumption that the economy grows by 10% is the "caveat" that is been used.

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smileyface is gonna clear the CFA L2 Exam on 5th June, 2011. And making this statement won't be a violation of Code of Ethics since its a fact. ;-)