Investment Process Compliance with AMC

Very Hard Asset Manager Code Investment Process

XYZ Asset Management is reviewing its adherence to the CFA Institute's Asset Manager Code (AMC). As part of its commitment to uphold ethical standards and transparency, the firm has implemented a robust investment process. The firm’s Chief Compliance Officer (CCO) has requested a report outlining how XYZ’s investment process aligns with the AMC, particularly regarding the integrity of research and analysis.

Considering the guidelines set forth in the Asset Manager Code, which of the following best exemplifies an ethical investment process that would comply with these standards?

Having analysts exclusively rely on sell-side research reports while avoiding any independent verification of the data.

Conducting in-house research, utilizing quantitative models, and disclosing any potential conflicts of interest in the investment analysis process.

Relying on a proprietary trading algorithm developed by a third party that lacks transparency in its execution methodology.

Hint

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