Chartered Financial Analyst Level 1

Get started today

Ultimate access to all questions.

Explanation:

According to Standard II(A) - Material Nonpublic Information, members and candidates who possess material nonpublic information that could influence an investment's value must refrain from acting or inducing others to act on such information. In this scenario:

Hadid violated the standard by disclosing her analysis of SML to Jackson, thereby providing him with material nonpublic information.
Jackson violated the standard by acting on this information to purchase call options on SML.

Thus, both individuals are in breach of Standard II(A). The correct answer is C.

Explanation:

Hadid violated the standard by disclosing her analysis of SML to Jackson, thereby providing him with material nonpublic information.
Jackson violated the standard by acting on this information to purchase call options on SML.

Thus, both individuals are in breach of Standard II(A). The correct answer is C.

Comments (0)

No comments yet.

Iris Hadid, CFA, is an investment banking analyst who develops a financial model to evaluate Ski Mountain Lodge (SML). Her colleague, Peter Jackson, CFA, works at a separate advisory firm. Hadid shares her analysis details with Jackson to obtain feedback on her SML valuation. Subsequently, Jackson purchases call options on SML. Which individual(s) breached the CFA Institute Standards?

Exam-Like

Hadid exclusively

0.0%

Jackson exclusively

14.3%

Both Hadid and Jackson

85.7%