Ch 5 Deck 8

Question 1

No employee of IB department can have this relationship with research analyst

Answer 1

control or supervision

Question 2

No employee of an IB department can exercise influence on an analyst’s

Answer 2

compensation

Question 3

research reports can only be reviewed by these persons outside research department prior to publication

Answer 3

legal of compliance

Question 4

If someone besides legal or compliance outside the research firm reviews a report prior to publication it must be for the purpose of

Answer 4

verifying accuracy of its information

Question 5

written or oral communication with research department regarding content of a research report must be made through

Answer 5

authorized legal or compliance personnel

Question 6

Member firm may not submit any portion of research report to subject company prior to

Answer 6

publication

Question 7

Member firm may submit a portion of research to subject company prior to publication if necessary to

Answer 7

verify factual information

Question 8

Sections of a research report submitted to a subject company prior to publication must not contain

Answer 8

the research summary

Question 9

Sections of a research report are submitted to a subject company prior to publication what must be reviewed by legal and compliance prior to delivery?

Answer 9

the complete draft of the report

Question 10

if research changes its rating of a subject company after submitting a section to the subject company prior to publication it must (through legal and compliance) notify the issuer of the change no sooner than

Answer 10

the close of the trading date before the public announcement

Question 11

No research analyst may participate in the

Answer 11

solicitation of investment banking business

Question 12

A research analyst may not communicate with customer’s or prospective customers about

Answer 12

investment banking transactions

Question 13

Analyst can’t be at the

Answer 13

pitch meeting

Question 14

member firms cannot pay research analysts contingent on specific

Answer 14

investment banking transactions

Question 15

Compensation of research analysts responsible of substance of research reports must be reviewed and approved

Answer 15

at least annually

Question 16

Compensation of research analysts responsible of substance of research reports must be reviewed and approved by

Answer 16

a committee reporting to the board of directors

Question 17

Compensation review committee for analysts cannot include

Answer 17

anyone from the IB department

Question 18

Research analyst performance review cannot include input from

Answer 18

IB department

Question 19

Research analyst performance review must be include correlation between

Answer 19

analyst’s recommendations and the performance of the stock

Question 20

In reviewing compensation of research analysts, the committee may not consider the analyst’s contribution to the

Answer 20

IB business

Question 21

Analysts may not purchase or receive IPO shares if

Answer 21

the company issuing IPO is in business sector the analyst studies

Question 22

If an analyst follows a company, he may not

Answer 22

he is restricted on purchasing or selling any security from that company

Question 23

If an analysts follows a company, he may not purchase or sell its securities within the window of

Answer 23

30 days before to 5 days after publishing a research report on the company or its securities

Question 24

No research analyst can trade in a manner inconsistent with his own recommendations in

Answer 24

the member firms most recent research report

Question 25

A member firm must disclose in research reports AND a research analyst must disclose in public appearances what if any interest

Answer 25

analyst or family member has in securities of subject company

Question 26

A member firm must disclose in research reports AND a research analyst must disclose in public appearances whether firm or affiliates have owned

Answer 26

1% or more of company’s common stock as recently as one month before report or appearance

Question 27

A member firm must disclose in research reports AND a research analyst must disclose in public appearances whether analyst or firm or affiliate has received

Answer 27

• compensation from the subject company for investment banking services over past 12 months

Question 28

A member firm that has received compensation for non-investment banking services over the last 12 months must disclose in research reports AND a research analyst must disclose in public appearances

Answer 28

what services were provided

Question 29

A member firm must disclose in research reports AND a research analyst must disclose in public appearances whether the analyst has served as

Answer 29

an officer or director of the company