I think I would have answered C. Look at the ethics book, page 43, example 10, it’s an example where even using a generic description of a P/E ratio, it would need to be cited if its someone else’s description. That could be described as widely available public information. Best practice I’d think would be to cite sources wherever there’s doubt.
I think it’s cause A is too generic. So, even if it’s some work that’s widely available to the public, as long as it belongs to someone else, you have to cite.
But i recall seeing something on not citing S&P or other standard financial sources if they are used in making a report - can someone who knows this chip in with their take?
from what i remember reading, there was definitely something said that WIDELY READ PUBLIC INFO like Wall street journal did not need to cited as a source. then again, this was a question on Schweser practice exam 3:
Ann Smith, CFA calls Bill Jones, CFA, and tells him her research shows that Biokem Company is underpriced and EPS will exceed $3.00 this year. Jones never heard of Biokem but knows that Smith is widely considered to be the best analyst in her sector. Smith’s research has been released publicly and Smith tells Jones he’s “welcome to it”. After their conversation Jones arranges a conference call with his portfolio managers and announces that Biokem is underpriced and will likely earn more than $3 this year. He does not reference his conversation with Smith. According to the standards that concern misrepresentation and diligence and reasonable basis, Jones violated:
a. both
b. one
c. neither
Obviously diligence and reasonable basis is violated, but considering Smith’s information is publicly released and Smith is widely considered to be the best analyst in her sector, I thought this would constitute her to be a well known public source, so he needn’t cite her. But the answer is both, meaning I was wrong
I guess only if it is mentioned that it is a newspaper or some finance monthly publication, we can’t take anything to be a well known public source.
yes, Smith’s research needs to be acknowledged because though it is public, it is a specialized set of knowledge - like in patent applications you need to cite previous relevant patents as exisiting knowledge… you see?
But if CNN says the economy is tanking, and that is one of the reasons to invest in Biokem stock, we need not cite CNN because such info is widely public knowledge.
But that would tirgger the reasonable and diligent basis Standard
I sense the difference here is subtle but common knowledge would be knowing the location of Japan in relation to the United stated (west of the US) versus public knowledge written by a new agency is still the research done by the new agency. You should cite CNN (hopefully one wouldn’t have to) if that’s where your “source” is.
My experience with Elan mocks is that they are poorly written…
thanks guys. this is a schweser question though. anyways, just read that even if its a finance publication, you should cite the source, so im thinking if there is a question on this, then i’m pretty sure they would make it clear that everyone in the finance industry knows about this news information, and in that case you don’t need to cite the source, but otherwise you do
