Reading 4 Flashcards
With respect to the Global Investment Performance Standards, which of the following is one of the nine sections containing investment performance provisions?
Real Estate.
Derivatives.
Legal and Ethical Considerations.
(Institute 161)
Institute, CFA. 2015 CFA Level I Volume 1 Ethical and Professional Standards and Quantitative Methods. Wiley Global Finance, 2014-07-14. VitalBook file.
A is correct. Real Estate is one of the nine sections in the 2010 edition of the GIPS standards. Derivatives and Legal and Ethical Considerations are not sections of the Standards.
(Institute 162)
Institute, CFA. 2015 CFA Level I Volume 1 Ethical and Professional Standards and Quantitative Methods. Wiley Global Finance, 2014-07-14. VitalBook file.
According to the Fundamentals of Compliance section of the Global Investment Performance Standards, issues that a firm must consider when claiming compliance include all of the following except:
replicating performance.
properly defining the firm.
documenting firm policies and procedures used in establishing and maintaining compliance with the Standards.
(Institute 161)
Institute, CFA. 2015 CFA Level I Volume 1 Ethical and Professional Standards and Quantitative Methods. Wiley Global Finance, 2014-07-14. VitalBook file.
A is correct. Replication of performance is not included in the Fundaments of Compliance section within the GIPS standards.
(Institute 162)
Institute, CFA. 2015 CFA Level I Volume 1 Ethical and Professional Standards and Quantitative Methods. Wiley Global Finance, 2014-07-14. VitalBook file.
G&F Advisors claims compliance with the Global Investment Performance Standards (GIPS) in its marketing materials. The compliant presentation includes a footnote which indicates that the firm has been verified by an independent third party. An additional note states that G&F is in compliance with the GIPS standards except for its private equity investments. It is likely that G&F violated the GIPS standards?
No, because the footnotes meet the requirements of the Standards.
No, because the provisions do not apply to the private equity investments.
Yes, because they cannot claim compliance unless all requirements of the Standard are met.
(Institute 161)
Institute, CFA. 2015 CFA Level I Volume 1 Ethical and Professional Standards and Quantitative Methods. Wiley Global Finance, 2014-07-14. VitalBook file.
C is correct. Firms must meet all the requirements set forth in the GIPS standards and cannot claim partial compliance.
(Institute 162)
Institute, CFA. 2015 CFA Level I Volume 1 Ethical and Professional Standards and Quantitative Methods. Wiley Global Finance, 2014-07-14. VitalBook file.
