Submitted by: Submitted by momolailai
Views: 10
Words: 562
Pages: 3
Category: Business and Industry
Date Submitted: 02/17/2016 09:50 AM
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FIN193 portfolio analysis
to: Professor sentezA
from: Chuqiao Chen
subject: CFA eThics Standards Module 5
date: [ 5/6/15 ]
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In this write-up, I will summarize the CFA Ethics Standard Module 5 and describe how to use the ethics standard in real situation.
I. Summary
CFA Ethics Standard Module 5 provides a guild for ethical behavior for investment analysis, recommendations and action.
There are 3 key components in the Ethics Course Module 5
1) Diligence and Reasonable Basis,
2) Communications with Clients and Prospective Clients,
3) Record Retention,
First off all, Diligence and reasonable basis require CFA candidates and members doing investment analysis, recommendation or action based on a reasonable and adequate basis. There should be adequate research to support the investment analysis, recommendation or action. With different requirement, CFA candidates and members should consider the company’s current financial conditions, historical performance and the assumptions they are used while doing evaluation and finally determine if this company is fit in the requirement. If they will use secondary, third-party or quantitatively oriented research in decision making process, they should make sure all those source is sound. There are also several criteria used in reviewing external advisers including a good internal control process, solid return information and consistency on a stated strategy. In a group research report, if the recommendation is reasonable and with adequate basis, this member doesn’t need to remove his name from the report.
Second, Communications with clients and prospective clients requires CFA candidates and members disclosure appropriate information to clients and prospective clients about the investment process used to analyze investment and the...