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Question:
Amir Khan, CFA, is an investment manager at Invest Capital. His friend thinks that Alpha Corp’s earnings growth rate will exceed expectations in the forthcoming quarter. Based on this information, Khan issues a buy recommendation on Alpha’s stock. Which of the following standards has Khan most likely violated?
A
Standard V (A): Diligence and Reasonable Basis
explanation
• Khan has not exercised reasonable care and prudent judgment in issuing the
• His recommendation is only based on his friend’s opinion. Therefore, he has violated Standard V (A).
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