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CFA Level 2
Ethical and Professional Standards

Impact of Compensation on Research Objectivity

Very Easy Research Objectivity Standards Compensation Arrangements

In the context of the CFA Institute's Research Objectivity Standards, compensation arrangements for research analysts must align with the objective of providing unbiased and independent research. Consider the following scenario:

Mary, a research analyst at ABC Investment Firm, is compensated with bonuses that are tied to the performance of the funds she covers. This structure raises potential concerns about her ability to maintain objectivity in her research reports. Based on the Research Objectivity Standards, which of the following statements is most accurate regarding Mary’s compensation arrangement?

Hint

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