LeCompte violated Requirement 6, Relationships with Subject Companies, by sharing the full research report with NanoMem. Sharing any section of a research report that might communicate the analyst’s proposed recommendation, rating, or price target is prohibited by the Research Objectivity Standards. Sharing historical factual information, on the other hand, is not a violation.
LeCompte shared with UniFlash management only the part of her report on UniFlash that provides factual information.

. Bett in his comment about the second weakness of reduced form models. It is a weakness of structural models because their credit risk measures are biased because implicit estimation procedures inherit errors in the model’s formulation.
because his comment regarding assumptions is correct.
because his comment regarding the first weakness is correct.

Even if LeCompte discloses the cost of her attendance she may still not be permitted to take the trip depending upon her company’s policies. In addition, the dis- closure in this case is not enough to avoid a potential violation of Standard I(B) relating to independence and objectivity. By allowing the corporate issuer to pay for her travel expenses her judgment could be compromised. It is more appropriate for LeCompte to decline the invitation or have her company pay all costs for the trip in order to avoid any conflict or appearance of conflict.
The actions are appropriate and would avoid poten- tial conflicts.

. Although Lin is correct that the DCF method takes into account the cash flows that investors care about, she is not correct in stating that DCF takes into account the cyclical nature of the real estate market.
. Lin is correct about the cost approach.
. Lin is correct about the sales comparison approach.

The change in revenue recognition to an earlier point, before the product has been produced or delivered, is an aggressive accounting policy that would lower the company’s quality of earnings.
The change in the warranty expense reflects updated information, and failure to act on it would underestimate earnings.
The stock grants are expensed over the estimated service life of the employees, in this case the 3 years till it vests, and does not distort the quality of earnings.