IBBC CAPITAL ACADEMY / 2027
Reasonable research and transparent model communication
Independent IBBC Capital draft content for self-study. Not affiliated with or endorsed by CFA Institute. New lessons await subject-matter review. No CFA designation or official PSM credit is awarded.
Learning goals
- Diagnose the conduct from the facts and relevant professional duties.
- Recommend a documented preventive and corrective response.
Draft · approximately 60 minutes, excluding further revision.
Decision case · fictional facts
A fictional analyst uses an AI-generated earnings forecast without checking inputs. Marketing calls the projection a fact, omits material fees and model limitations, and deletes the supporting calculations after publication. The recommended product’s construction has changed substantially since clients received the old description.
Duties and competing interests
Recommendations need a reasonable basis supported by appropriate diligence, independence and analysis. Third-party or AI output does not transfer responsibility; assess source quality, assumptions, data integrity and whether the method suits the decision. Scenario sensitivity and contrary evidence help test robustness.
Communicate the nature of the process, material risks, limitations and important changes, distinguishing facts from opinions and forecasts. Explain relevant services and associated costs clearly. Maintain appropriate records supporting recommendations and communications; retention periods depend on governing rules and policies. Where regulatory guidance and firm policies are absent, CFA Institute recommends retaining records for at least seven years; this is a professional recommendation, not a universal legal rule.
Decision, controls and remaining uncertainty
Validate the model, inputs and scenarios before issuing a recommendation. Label the earnings estimate as a conditional forecast, disclose material fees and limitations, and notify clients of the changed process.
Preserve versioned source data, calculations, approvals and communications under the applicable record policy. If a prior statement was misleading, follow a documented correction and notification process.
Formula and assumptions
Identify facts → duties → affected parties → feasible action → evidence and follow-up
Compare with the model response after drafting
- Validate the model, inputs and scenarios before issuing a recommendation. Label the earnings estimate as a conditional forecast, disclose material fees and limitations, and notify clients of the changed process.
- Preserve versioned source data, calculations, approvals and communications under the applicable record policy. If a prior statement was misleading, follow a documented correction and notification process.
Errors to catch
- Treating disclosure, client consent or a supervisor’s instruction as permission for prohibited conduct.
- Inventing missing facts or treating a potential concern as a proven legal violation.
Write, compare, then self-assess
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Original knowledge check
Answer every question before checking. Review explanations after submitting; retry starts a new attempt.
Sources and coverage status
These original lessons are drafts. Public outlines are used to check scope; the official learning-outcome text and proprietary question banks are not reproduced here. Follow the source for exam-year requirements and updates.