Critical Reasoning (CR) | Re: Investment banks often have conflicting roles. They sometimes act for

Understanding the argument -
Investment banks often have conflicting roles. Fact/opinion
They sometimes act for a client company by raising capital from other investment institutions as advantageously as possible, but their analysts also sometimes send unfavorable reports on the financial health of companies for whom they are raising capital to other clients who wish to make investments. Fact
Analyses of companies’ financial health need to be unbiased if an investment bank is to achieve long-term success. - Conclusion. Unbiasedness is vital for long-term success.

Option Elimination - We need to find an option if adopted, that would hinder long-term success. So, what will hinder long-term success if they are biased? Yes. So, we need to find an option that leads to a biased view.

(A) Evaluating and rewarding the bank’s analysts on the basis of recommendations made by managers who are solely engaged in raising capital for clients - What's in the interest of managers who are solely
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Statistics : Posted by Raman109 • on 12 Jul 2007, 08:26 • Replies 24 • Views 62365

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