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LOS c: Explain the fundamentals of compliance with the GIPS standards, including the definition of the firm, the conditions under which an investment management firm can claim compliance, and the correct wording of the GIPS compliance statement.
Q1. Eric Jicu, a highly successful portfolio manager of the EJ Fund, wishes to define the EJ Fund as a firm under the Global Investment Performance Standards (GIPS?) standards. Jicu is employed by National Investing Alliance (NIA), a small regional brokerage firm. Although he has disclosed this information to his superiors at NIA, he would like to disclose his compliance for marketing purposes by using his past actual performance results of five years, which included two years of simulated results. Jicu also managed several non-fee-paying portfolios that were non-discretionary under a different investment style. Since the results of these non-discretionary portfolios were highly successful, he wanted to include them into his EJ Fund composites for compliance. In his statement of compliance, Jicu wrote: “The EJ Fund has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS?).”
In defining a firm, does the EJ Fund qualify as a firm under GIPS?
A) No, since to claim compliance NIA must be included.
B) Yes, since the EJ Fund is a separate entity it does qualify under GIPS.
C) No, since there is no mention that Jicu is incorporated he cannot qualify as a firm.
Q2. In constructing the historical results of the EJ Fund, is Jicu correct in his approach?
A) No, because simulated results cannot be included with actual performance results.
B) Yes, because he included five years of actual performance data.
C) No, because GIPS requires a minimum of ten years of performance before claiming compliance.
Q3. In constructing the composites, is Jicu correct in his approach?
A) No, since fee-paying and non-fee-paying portfolios cannot be included in the same portfolio.
B) Yes, since fee-paying and non-fee-paying portfolios can be included in the same composite as long as they have the same investment objectives.
C) No, since the fee-paying discretionary portfolios are managed under a different investment style as the non-fee-paying non-discretionary portfolios.
Q4. In the compliance statement, is Jicu correct is claiming compliance?
A) No, since Jicu’s GIPS compliance statement is not written correctly.
B) No, since Jicu is not in full compliance with GIPS.
C) Yes, since Jicu is in compliance with GIPS.
Q5. If DeLecrette Investment Management wishes to claim compliance with the Global Investment Performance Standards (GIPS?) for their annual financial report, the report must include which of the following statements?
A) DeLecrette Investment Management has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS?).
B) DeLecrette Investment Management has prepared and presented this report in compliance with the Global Investment Performance Standards of the CFA Institute (CFA Institute -GIPS?). The CFA Institute Global Investment Performance Standards Committee has not been involved with the preparation or review of this report.
C) DeLecrette Investment Management has prepared and presented this report in compliance with the Global Investment Performance Presentation Standards of the CFA Institute(CFA Institute -GIPS?). CFA Institute has not been involved with the preparation or review of this report.
Q6. Which of the following compliance statements is mandated by the Global Investment Performance Standards (GIPS)?
A) [Insert name of firm] has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS).
B) [Insert name of firm] has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS) of the CFA Institute. CFA Institute has not been involved in the preparation or review of this presentation.
C) [Insert name of firm] has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS?).
Q7. Which of the following is NOT an important characteristic of how a firm defines itself? The firm definition establishes the:
A) entity to which the GIPS standards apply when a claim of compliance is made.
B) set of portfolios that must be included in at least one of a firm's composites.
C) entity to which local securities laws apply when they exceed the GIPS requirements.
Q8. PTN, Inc., is an investment consulting firm. It has used Global Investment Performance Standards (GIPS) since its inception two years ago. PTN claims to be in compliance with GIPS. Could this statement be TRUE?
A) No, consulting firms cannot be GIPS compliant.
B) No, PTN does not have a five-year compliance track record.
C) Yes, PTN does not have a five-year track record, so since inception is sufficient.
Q9. Whenever an investment management firm presents its investment performance as being in compliance with the Global Investment Performance Standards (GIPS), it must state how it defines itself as a firm. Under GIPS, a firm may define itself for the purpose of claiming GIPS compliance using any of the following options EXCEPT when:
A) all assets are managed to one or more base currencies.
B) the subsidiary or division of a company claims GIPS compliance when the parent company is GIPS compliant.
C) an investment firm, subsidiary, or division is held out to clients or potential clients as a distinct business unit.
Q10. Which of the following compliance statements is most acceptable under the Global Investment Performance Standards (GIPS)?
A) [Insert name of firm] has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS?).
B) [Insert name of firm] has prepared and presented the performance results in compliance with the Global Investment Performance Standards (GIPS?) for all composites containing equity investments.
C) [Insert name of firm] has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS?) and the CFA Institute. | 
发表于 2009-4-10 15:47
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