Mike Jordan recently met his old friend, Charlie Barklee, who's an accomplished statistician. Charlie showed him his new model for predicting stock prices and after considerable discussion, Mike was convinced the model was a viable alternative to his current methodology for picking stocks. To test it, he downloaded historical data from a well-known statistical data provider's web site. The tests indicated that some parts of the model needed fine tuning, which Mike implemented himself, without Charlie's help. Mike:
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A. B. C. D.D
Standard II (C) - Prohibition against Plagiarism.
Based on the given information, Mike Jordan met his friend Charlie Barklee, who shared his new model for predicting stock prices with Mike. After discussing the model, Mike was convinced that it could be a viable alternative to his current methodology for picking stocks. To test the model, Mike downloaded historical data from a well-known statistical data provider's website. During the testing process, Mike identified certain parts of the model that needed fine tuning, which he implemented himself without Charlie's assistance.
In this scenario, the question is asking about the appropriate actions that Mike should take. Let's analyze the options provided:
A. cannot circulate the model since it is not publicly available.
This option suggests that Mike cannot share or circulate the model since it is not publicly available. However, the information provided does not explicitly mention anything about the model's availability or restrictions on sharing. Therefore, there is insufficient information to support this answer choice.
B. can show his clients the model, without any special disclosures, because all of the tests were done by him with publicly available data.
This option suggests that Mike can show his clients the model without any special disclosures because he conducted all the tests himself using publicly available data. However, the answer choice overlooks an important aspect of the situation: the contribution made by Charlie Barklee, the statistician who developed the model. Charlie shared his model with Mike, and although Mike made some fine-tuning adjustments, it does not negate Charlie's contribution. Simply showing the model without acknowledging Charlie's involvement would not be appropriate.
C. none of these answers.
This answer choice suggests that none of the provided options are correct. Without further information or analysis, it is challenging to determine if this is the correct answer. Let's assess the final option for a more thorough evaluation.
D. must acknowledge Charlie's contribution. Otherwise, he would be in violation of the code of ethics and be subject to disciplinary action from AIMR.
This option suggests that Mike must acknowledge Charlie's contribution; otherwise, he would be in violation of the code of ethics and could face disciplinary action from AIMR (Association for Investment Management and Research, now known as CFA Institute). In the financial industry, acknowledging the contributions and intellectual property rights of others is essential for ethical conduct.
The CFA Institute, which administers the CFA® program, places a strong emphasis on ethics and integrity in the investment profession. Candidates and charterholders are required to follow the CFA Institute's Code of Ethics and Standards of Professional Conduct.
Standard I(B) - Independence and Objectivity states that CFA Institute members and candidates must disclose any limitations associated with their analyses, recommendations, or investment strategies. Moreover, Standard VI(A) - Disclosure of Conflicts requires that members and candidates disclose any potential conflicts of interest that could compromise their independence or objectivity.
In the given scenario, Mike should acknowledge Charlie's contribution to the model when presenting it to his clients. By failing to disclose Charlie's involvement, Mike would be in violation of the code of ethics and standards of professional conduct, potentially leading to disciplinary action from AIMR/CFA Institute.
Therefore, the correct answer is D. Mike must acknowledge Charlie's contribution; otherwise, he would be in violation of the code of ethics and could face disciplinary action from AIMR/CFA Institute.