Explanation:
The analyst did not violate the GARP Code of Conduct, as industry forecasts are an appropriate measure to base rational expectations regarding the future performance of a company.
(Book 1, Module 11.1, LO 11.a)
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Question 77
An analyst for a brokerage firm made the following statement in a research report: "This company is expected to outperform the market based on significant forecasted increases in sales for the industry overall." The report continues with a risk analysis of the industry and company-specific risks. With respect to this report, the analyst:
A
did not violate the GARP Code of Conduct.
B
violated the GARP Code of Conduct by failing to base recommendations on the facts.
C
violated the GARP Code of Conduct by making a recommendation that may not be suitable for all clients.
D
violated the GARP Code of Conduct by failing to be familiar with all generally accepted risk management practices.
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