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CFA Level 2
Ethical and Professional Standards

Compensation Arrangements and Research Objectivity

Medium Research Objectivity Standards Compensation Arrangements

As a research analyst at a large investment firm, you are required to adhere to the CFA Institute's Research Objectivity Standards. Recently, your firm introduced a new compensation plan that offers analysts bonuses based on the performance of the stocks they recommend. This arrangement aims to align analysts' interests with those of the firm, but it raises concerns regarding potential biases in the research outputs. Given this context, which of the following statements best reflects a compliance concern regarding the new compensation arrangement?

Hint

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