S18

Question 1

From X, portfolios must be valued according…

Answer 1

Jan 1, 2011, with the definition of fair value or GIPS valuation principles (not book of cost values)

Question 2

From X, Y date accounting should be used

Answer 2

From Jan 1 2005 trade date accounting (not settlement date accounting)

Question 3

For fixed income securities what accounting to be used ?

Answer 3

accrual accounting

Question 4

Portfolios must be valued at least

Answer 4

quarterly - before Jan 1 2001
monthly - from Jan 1 2001
on the date of large CF AND end of the month - from Jan 1 2010

Question 5

firms composites and portfolios from composites must have what valuation dates

Answer 5

consistent beginning and ending annual valuation dates from Jan 1 2006

Question 6

Dietz return calculation was acceptable until

Answer 6

Jan 1 2005

Question 7

Modified Dietz or Modified IRR

Answer 7

required after Jan 1 2005

Question 8

all actual fee paying discretionary portfolios …

Answer 8

must be included in at least one composite

Question 9

firm must include a terminated portfolio in the historical performance of appropriate composite until

Answer 9

up to the last full measurement period that the portfolio was under management (or last full period or discretionary managmenent)

Question 10

porftolio can be switched from one composite to another if

Answer 10

• client revises mandate, objective, strategy

- original composite is redefined and doesn;t fit the portfolio

Question 11

carveout must not be included in a composite unless

Answer 11

it is managed separately with its own cash balance

Question 12

carveout had disclose cash allocation policy prior to

Answer 12

Jan 1 2010

Question 13

percentage of composite composed of carveouts as of each annual period end has to be shown in presentations starting with

Answer 13

Jan 1 2006 and ending Jan 2011.

Question 14

gips compliance sentense

Answer 14

Firm X claims compliance with Global Investment Performance Standards (GIPS (R) )_ and has prepared and presented this report in compliance with the GIPS Standards. Firm X has not been independently verified.

Question 15

firms must disclose valuation using subjective unobservable inputs from

Answer 15

Jan 2011

Question 16

when presenting gross of fees returns, firms must disclose if they

Answer 16

deduct any other fees in addition to the actual trading expnses

Question 17

when presenting net of fees returns firms must disclose if

Answer 17

any other fees are deducted in addition to the actual trading expenses and the investment management fee.

Question 18

real estate must be valued at least quarterly from

Answer 18

2008

Question 19

real estate must be valued on calendar quarters from

Answer 19

2010

Question 20

external valuation for real estate needed

Answer 20

each 36 months prior to 2012

each 12 months from 2012

Question 21

real estate return components

Answer 21

capital return + income return

Question 22

capital return (RE) =

Answer 22

((V1-V0) - Capex + Sales ) / Capital Employed

Question 23

income return (RE) =

Answer 23

= (investment income - nonrecoverable expenditures - interest - taxes ) / Capital employed

Question 24

Annualized since inception SI IRR must be calculated for private equity from

Answer 24

2011 - using daily CF

before 2011 - either daily or monthly

Question 25

For PE composites, firms must present annually

Answer 25

cumulative commited capital since inception paid in capital since inception distribution formulas - total value to since inception paid in capital (aka investment multiple) - since inception distributionto since inception paid in capital (aka realization multiple) - since inception paid in capital to cumulative commited capital (PIC multiples) - residual value to since inceptoin paid in capital (unrealized multiple)

Question 26

ads with claim of compliace and presenting performance ...

Answer 26

MUST present one of the following set of returns PERFORMANCE - 1 3 5 year annualized composite returns through the most recent period - period to date composite returns in addition to 1 3 5 annualized composite returns through the same period of time as presented in the corresponding compliant presentation - period to date composite returns in addition to 5 years of annual composite returns calculated through the same period of time as presented in the corresponding compliant presentation BENCHMARK - benchmark description - benchmark performance for same periods as composite performance LEVERAGE - use of leverage

Question 27

verification does not provide assurance that

Answer 27

specific composite returns are correctly calculated and presented

Question 28

GIPS are

Answer 28

ethical standard that promote fair representation and full disclosure of an investment firm's performance history

Question 29

GIPS require following items to be contained in the composite performance presentation:

Answer 29

- annual composite and benchmark total returns for each annual period - number of portfolios in the composite (if more than 5) at period end - amount of assets in the composite at the annual period end (as % composite in total assets or total firm assets at the end of each annual period - a measure of dispersion of individual portfolio returns withing the composite - (from 2011) 3 year standdev of composite and benchmark returns

Question 30

performance of past firm must be linkedn to represent historical record of new firm if:

Answer 30

- substantially all decision makers remain in place - decision making process remains intact and independent - new firm has records that document and support the reported performance

Question 31

verification is a process by which

Answer 31

an independed verifier assesses if - firm has complied with all the composite construction requirements on a firm wide basis - firm policies and procedures are designed to calculate and present performance in compliance with GIPS

Question 32

what performance is preferred - net or gross of fees

Answer 32

gross of fees

Question 33

benefits from GIPS

Answer 33

- the ability to compare the performance of firms operating in different countries with different sets of established practices - provide managers with the ability to compete fairly in fo reign markets

Question 34

GIPS Objectives

Answer 34

- Establish global, industry-wide best practices for the calculation and presentation of investment performance - Facilitate the accurate and unambiguous presentation of investment performance results to current and prospective clients. - Facilitate a comparison of the historical performance of investment management firms so that clients can make educated decisions when hiring new managers. - Encourage full disclosure and fair global competition without barriers to entry. - Encourage self -regulation.

Question 35

recommended, not required GIPS

Answer 35

- should disclose material changes to valuation policies and/ or methodologies. - should disclose material changes to calculation policies and/or methodologies. - should disclose material diff erences between the benchmark and the composite's investment mandate, obj ective, or strateg y. - should disclose the key assumptions used to value portfolio investments. - If a parent company contains multiple defined firms, each firm within the parent company should disclose a list of the other firms contained within the parent company. - prior to January 1, 20 11, firms should disclose the use of subjective unobservable inputs fo r valuing portfolio investments if the portf olio investments valued using subjective unobservable inputs are material to the composite. - prior to January 1, 2006, firms should disclose the use of a sub-adviser and the periods a sub-adviser was used. - should disclose if a composite contains proprietary assets.

Question 36

acceptable measures of dispersion

Answer 36

- The range of annual returns. - The high and low annual returns. - lnterquartile range. - The standard deviation of equal-weighted annual return. - The asset-weighted standard deviation of annual returns.

Question 37

capital employed in Real estate is

Answer 37

CF0+ weighted intraperiod CF

Question 38

private equity must annually report both

Answer 38

gross of fees and net of fees returns