Which of the following AIMR Standards states that the financial analyst shall distinguish between facts and opinions in research reports?
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A. B. C. D.D
Standard IV (A.2) - Research Reports states: "Members shall distinguish between facts and opinions in research reports."
The AIMR (Association for Investment Management and Research) Standards were a set of ethical guidelines for financial analysts that were used before they were replaced by the CFA (Chartered Financial Analyst) Institute's Code of Ethics and Standards of Professional Conduct. In this question, we are asked to identify which specific standard addresses the requirement for financial analysts to distinguish between facts and opinions in their research reports.
Let's analyze each of the answer choices to determine the correct option:
A. III A: This answer choice does not directly address the distinction between facts and opinions in research reports. Standard III A of the AIMR Standards focuses on the duties of loyalty, prudence, and care that financial analysts owe to their clients.
B. III D: This answer choice does not directly address the distinction between facts and opinions in research reports either. Standard III D of the AIMR Standards pertains to the responsibilities of supervisors and the need for appropriate supervision of research and investment recommendations.
C. III (B.1): This answer choice specifically refers to Standard III (B.1) of the AIMR Standards, which states that financial analysts should distinguish between fact and opinion in the presentation of investment analysis and recommendations. This standard emphasizes the importance of clearly identifying and disclosing the sources of information, the assumptions made, and the limitations of the analysis conducted.
D. IV (A.2): This answer choice does not pertain to the distinction between facts and opinions in research reports. Standard IV (A.2) of the AIMR Standards addresses the requirement for financial analysts to maintain and promote the integrity of the capital markets.
Based on the analysis above, the correct answer is C. III (B.1), as it explicitly addresses the financial analyst's responsibility to distinguish between facts and opinions in research reports.