Jennifer, works as an analyst for XYZ.Recently, she presented to the company's investment committee, her completed research report on a company called Zebra Management Inc. Her recommendation to the investment committee is to "sell" all holdings of Zebra Management Inc. across the board.After much debate about Zebra Inc. the Investment Committee of XYZ reaches a consensus that is contrary to what Jennifer is recommending, not to sell its holdings of Zebra in its funds. Their reason was that Zebra has produced dividends on a consistent basis.

The committee's decision has placed Jennifer in an awkward position. She has to make a presentation at a meeting that is open to the company's (XYZ) clients and its management.

Unknown to Jennifer, at the time she wrote the original report on Zebra Management Inc., a private equity firm, Garcon's, indicated its intent to take over Zebra Management Inc. On the day of XYZ`s general meeting this news becomes public. Zebra Management Inc.'s shares increase 20 percent in value in the course of a day. Jennifer however, remains very skeptical of the takeover, but does not say anything at the meeting, nor during her presentation, because she wants to remain loyal to her employer.She does what the company has asked her to do and that is not to compromise their holdings in Zebra Management Inc. In other words, she delivers the company line.However, in her mind she doubts that the Garcon's board fully understands the industry and the role that Zebra Management Inc. plays.

Shortly after the meeting Jennifer writes an updated report to XYZ's investment committee, the updated report includes the new information of the takeover bid by Garcon's but again she repeats her "sell" recommendation.

The next morning, on Jennifer's recommendation, XYZ's traders sell their company's entire position of Zebra Management Inc. for a sizable profit. Their fund`s performance rebounds.

Several weeks later, Garcon`s cancels the deal and Zebra Management's stock price declines by 20 percent.

1.In one sentence outline what Jennifer`s best immediate course of action regarding her initial research report and recommendation on Management Inc. should be? (3 marks)

2.Regarding the public presentation on Zebra Management Inc., according to the CFA Standards and in keeping with good corporate ethical practices explain what the company should have done in regard to Jennifer's research on XYZ? (3 marks)

3.XYZ`s action on Jennifer`s second report resulted in profits for the funds that the company managed. Their funds made money for the unit holders because XYZ had the benefit of Jennifer`s second research paper, whereas many individual investors who bought shares of Management Inc. likely lost money.Explain the situation the individual investor is in both in terms of ethics and in terms of earning a profit. (3 marks)