Downgrade Warning Term Paper Example | Topics and Well Written Essays - 500 words

Downgrade ensample - Term Paper ExampleAccording to the report J.P. Morgan Tells Analysts To Warn of a Downgrade analysts independence is negatively affected when it needs to clearly communicate to the comp all and the client banker the reason behind specific assembly line recommendations. Analysts argon warned from conducting negative research and some sures penalize investors for recommending sale options. What exactly does Peter Houghtons memo submit? Does the memo say that analysts should compromise their independence? How does the memo raise questions about analysts independence? Does it stumble any difference whether analysts arent pressured to change recommendations, but only to make factual changes?Ans) The memo of Peter Houghton does not immediately point to analysts independence. The memo states that analysts should consult the company and the client banker before fashioning recommendations to an investor. Also the analyst should both accept the request of the resea rch note recommended by the firm or should clearly communicate to the firm as to why it cannot follow those recommendations. Yes, there is difference between asking analyst to change recommendations and making factual changes. What are the buy spatial relation and sell placement? Why magnate the sell side be unwilling to make sell recommendations on stocks? If the buy side has its own analysts, would the buy side ever look at sell side analysts reports?Ans) The buy side and the sell side are the two types of analysts. Sell recommendation is considered as a part of negative research which affects the firm negatively so the sell recommendation on stocks is viewed in a negative manner. Sell-side analysts typically work for full-service broker-dealers and make recommendations on the securities they cover. Buy-side analysts typically work for institutional money managers that purchase securities for their own accounts (Analyzing Analyst Recommendations para. 6). Why might sell