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Answer: Yes, by including the statement, 'The company will exceed analysts' earnings projections next month,' in the report
According to **Standard V(B): Communication with Clients and Prospective Clients**, opinions must be clearly distinguished from facts. Violations often arise when reports fail to separate historical data from forward-looking statements, such as earnings estimates or future market price projections, without indicating these are opinions subject to change. In this case, the statement about the company exceeding earnings projections is a forward-looking opinion, not a verifiable fact, thus constituting a violation. Additionally, **Standard III(B): Fair Dealing** emphasizes fair and objective treatment of clients, but it does not require simultaneous communication. The method of dissemination (email followed by phone calls) is acceptable under this standard, provided all clients receive the information in a fair manner.
Author: LeetQuiz Editorial Team
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After conducting a thorough analysis, Algiris Vasilis, CFA, issues a 'buy' recommendation for a company's stock. In his report, he states: 'The company will exceed analysts' earnings projections next month.' Vasilis initially disseminates the recommendation to all clients via email and subsequently contacts each client by phone to present the recommendation. Did Vasilis violate the CFA Institute Standards?
A
No
B
Yes, by contacting each client via phone to present the recommendation
C
Yes, by including the statement, 'The company will exceed analysts' earnings projections next month,' in the report
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