These shortquestions require you to demonstrate your understanding of ethical investment practices. To maximise your marks you should refer to the appropriate CFA Code of Ethics and Professional Standards.

a) Shane Percy is an equity analyst who specialises on the pharmaceutical industry. His firm employs a service that connects her to experts in the treatment of heart disease. Through various conversations, Percy enhances his understanding of the latest therapies and uses this information to produce stock picking recommendations.

Evaluate whether Percy has acted ethically in using the information from the experts.

b)In an effort to increase the value of her holdings in Quokka Ltd., Michelle Ross uses several internet chat rooms to start rumours that the firm is about to expand operations in anticipation of receiving a large customer contract.

Identify the strategy that Ross is using and determine whether she has acted ethically.

c)Despite been widely viewed as unethical, some economists believe that insider trading should be allowed by regulators. Briefly discuss why economists might hold this belief.