Suni Kioshi, CFA, is an analyst at Pacific Asset Management, where she covers small-capitalization companies. On her own time, Kioshi often speculates in low-price thinly traded stocks for her own account. Over the last three months, Kioshi has purchased 50,000 shares of Basic Biofuels Company, giving her a 5% ownership stake. A week after this purchase, Kioshi is asked to write a report on stocks in the biofuels industry, with a request to complete the report within two days. Kioshi wants to rate Basic as a "buy" in this report but is uncertain how to proceed. Concerning the research report, what action should Kioshi most likely take to prevent violating any of the CFA Institute Code of Ethics and Standards of Professional Conduct?
C is correct because the manager's ownership stake is a potential conflict of interest, which should be disclosed as required by Standard Ⅵ (A) Disclosure of Conflicts, but there is no requirement to sell the shares. As long as the analyst has completed a well-informed investment recommendation consistent with Standard (V) Diligence and Reasonable Basis and disclosed her ownership position, she could include the buy recommendation in her report.