Reading 3: Standard 5- Investment Analysis, Recommendations, and Actions

Question 1

Standard 5- INVESTMENT ANALYSIS

Answer 1

We will learn how to properly perform investment analyses’

Question 2

Standard 5A- Diligence and Reasonable Basis

Answer 2

1. ) Exercise diligence, independence, and thoroughness in analyzing investments.
2. ) Have adequate and reasonable basis for any investment analysis.

Question 3

Standard 5B- Communications With Clients and Prospective Clients

Answer 3

Members and Candidates must:

• you have to disclose the procedures of your investment analysis
• disclose risk and prospective limitations with the investment process.
• use reasonable judgement in identifying which factors are important to their investment analysis
• distinguish between fact and opinion in presentation of investment analysis (your research is not a FACT)

***REMEMBER: Expectations based on statistical modeling and analysis are NOT FACTS.

Question 4

Standard 5C: Record Retention

Answer 4

YOU MUST STORE THE RECORDS OF YOUR CLIENTS THAT HAVE INVESTED IN YOUR INVESTMENT PORTFOLIO.