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CFA Level 2
Ethical and Professional Standards

Research Objectivity Standards and Investment Banking Relationships

Hard Research Objectivity Standards Investment Banking Relationships

John is a senior analyst at a well-known investment firm that often engages in investment banking activities. Recently, his firm has been tasked with underwriting a major IPO for Company X. As part of his analytical process, John is working on a report that he intends to share with clients, which includes a recommendation about investing in Company X's stock.

However, John has received pressure from the investment banking division of his firm to present a favorable view of the IPO, as the success of the underwriting depends significantly on positive investment sentiment. John is aware of the firm’s compliance policies regarding research and the critical standards for objectivity but is uncertain how to approach the situation without jeopardizing his position.

Which of the following actions aligns best with the Standards on Research Objectivity and ethical responsibilities regarding John’s situation?

Hint

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% Correct48%