Question 3 Ethics [Total 8 Marks]

a) Assume we are now in mid-April 2023. After conducting your own analysis, you have made a decision to buy shares of CSGP in May. However, your friend, Jaden who is a financial advisor for CSGP tells you that CSGP's earnings for the first quarter 2023 is higher than the analyst estimates. He suggests you to buy its shares immediately (i.e. in mid-April 2023) before this information is announced to the public (and price increases). Please state and explain which CFA Institute Code and Standards Jaden has breached. (4 marks)

b) John Smith, who is an equity analyst, owns $100,000 worth of CSGP stocks. Johns supervisor asks him to write an analyst report on CSGP. Johns wife thinks that accepting the task will cause John to violate the CFA Institute Code of Ethics and Standards of Professional Conduct. Thus, she wants John to reject the task. However, John does not want to reject the task. He thinks that he will not violate the CFA Institute Code and Standards as long as he bases his report on facts. What is your opinion on the issue? In deciding whether to accept the task, which CFA Institute Code and Standards should John consider? When you answer this question, please assume that John cannot sell his CSGP stocks. (4 marks)